Vol. 41 No. 2 (2021): Apr-Jun / 2021

Vol. 41 No. 2 (2021)

Apr-Jun / 2021
Published March 30, 2021


The exchange rate in Orthodox, Keynesian and New Developmentalism theoretical models: a literature review
Willian Capriata, Leonardo Flauzino de Souza
Brazilian Journal of Political Economy

The main purpose of this paper is to present the differences in the exchange rates in macroeconomic models from the three current theoretical views: Orthodox, Post-Keynesian and New Developmentalism. To achieve this objective, it is proposed to make a bibliographic survey of the literature on open macroeconomics and exchange rate. The main differences among these views concerns to exchange rate determination, causes of exchange rate variations and balance of payments equilibrium determination.

JEL Classification: E12; E13; F41.

Panem et circenses: on the macroeconomics of the pandemic
Francisco Eduardo Pires de Souza
Brazilian Journal of Political Economy

This paper is about the consequences of pandemics on the macroeconomic behavior, with an empirical analysis of such effects on the Brazilian economy. Two features of the macroeconomic of pandemics are highlighted: the emergence of a dual economy, in which we have the coexistence of a sector where consumption and production are impaired by public health policies, side by side with a full employment sector; and a large redistribution of income between the public and the private sectors. Regarding the latter, we found that the redistribution had strong effects on the flows of savings in the Brazilian economy, and consequently on the stocks of net wealth: there was a sharp rise in public debt and an increase in private net wealth of 12% of GDP.

JEL Classification: E01; E21; E25; H51.

Conventions, Money Creation and Public Debt to Face the Covid-19 Crisis and its Aftermath: A Post-Keynesian View
Marco Flávio da Cunha Resende, Fábio Henrique Bittes Terra, Fernando Ferrari Filho
Brazilian Journal of Political Economy

The aim of this article is, on the one hand, to analyze, based on Keynes’s ideas, the relevance of money creation and public debt to mitigate the Covid-19 economic crisis, and, on the other hand, it analyses the role of conventions in this context.

JEL Classification: E12; E30; E50; E60.

The resistance of the four European worlds of welfare from the birth of the euro
Antón Losada, Cristina Ares
Brazilian Journal of Political Economy

This article compares parliamentary preferences on welfare expenditure in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Sweden, and the United Kingdom between 1996 and 2013. The analysis is focused on the relationship between the type of welfare regime and the programmatic offer on the volume of social spending. Two indexes were calculated: social spending and social retrenchment. Upon emergence from the recession, an increasingly homogeneous conception is detected of social policies as being subordinated to economic policies; convergence has occurred within each of the worlds of welfare, maintaining the variation among them found prior to the Crisis.

JEL Classification: H; H5; H51; H52; H53; H55.

Growth and institutional changes: a historical evolution
Alessandro Morselli
Brazilian Journal of Political Economy

This paper highlights the fact that neoclassical theory cannot explain the process of economic change. In an uncertain and ever-changing world, a theory based on static equilibrium models is of little help. Whereas we have placed the institutions at the centre of the understanding of economic systems, since they constitute their incentive structure. Thus, economic change is largely an intentional process created by individuals’ perceptions of the consequences of their actions. These perceptions, coming from the beliefs of individuals, combine with their preferences. In the end, a dynamic theory of economic change will not be built, but an attempt will be made to understand the link between institutions and economic growth, the process of change, and to develop assumptions, within its limits, capable of improving the human environment and economic results.

JEL Classification: B15; B25; B52.

Modern Money Theory: rise in the international scenario and recent debate in Brazil
Simone Deos, Olívia Bullio Mattos, Fernanda Ultremare, Ana Rosa Ribeiro de Mendonça
Brazilian Journal of Political Economy

This paper has a twofold purpose. The first one is to present the core ideas of MMT. The second one is to explain its recent rise in Brazil after the publication of Andre Lara Resende’s articles in the press in 2019 and a book in 2020. In order to do that, the paper is organized as follows. After the introduction, the first session presents the core ideas of MMT: i) chartal money, or tax driven money; ii) functional finance; iii) Minskyan financial fragility; iv) sectoral balances approach; v) employer of last resort. The second session presents some critiques MMT has received both from the orthodox and the heterodox sides at the international level. The third section discusses the particular way in which MMT’s ideas have recently arrived in Brazil, considering peculiarities of the Brazilian economic debate and political scenario. The final session brings back the main ideas presented in the paper and raises critics to Lara Resende’s contributions from a political economy perspective.

JEL Classification: E12; E60; E66.

The unexplored influences of modern physics on John R. Commons’ economic theory
Sebastião Neto Ribeiro Guedes, Rodrigo Constantino Jerônimo
Brazilian Journal of Political Economy

Previous works of John R. Commons’ interpreters have emphasized the influence of numerous theoretical-methodological references (e.g., pragmatism, evolutionism, etc.) in shaping his economic thought. However, almost no mention is made of the influence of particle and relativity physics, which, as we debate, provide sources of insights to his work. This paper explores these connections by showing that John R. Commons was not only interested in the advances of that science but was also inspired by them to produce parallels and analogies that allowed his theory to escape the pitfalls of individualism and determinism while incorporating time and space in an innovative way in the economic discourse.

JEL Classification: B15; B25; B31

Performance of clean development mechanism projects for sustainable development in Brazil
Elaine Aparecida Fernandes, Gustavo Barros Leite
Brazilian Journal of Political Economy

This paper analyzed, for the Brazilian case, the Clean Development Mechanism (CDM). The concept of negative externality and market failure was used to understand the need for environmental policies capable of favoring the sustainable development of countries. The results show the importance of scale for the registration of projects. The energy sector, for example, has more small-scale projects that were created to simplify procedures and lower costs. It was concluded, in general, that the CDM has become an international change. However, despite its importance being recognized globally, it was observed that the mechanism has weakened over time and there are uncertainties regarding the validity of the Kyoto Protocol.

JEL Classification: Q01.
historical landmark, as it is an innovative tool in contributing to the mitigation of climate

Narrative Economics and Behavioral Economics: contributions to the behavioral insights on post-Keynesian theory
Gabriel Vilela Resende Freitas
Brazilian Journal of Political Economy

The objective of this review is to discuss the formation of knowledge proposed by Keynes on his Treatise on Probability, and the economic agents’ behavior in an uncertainty scenario presented on his General Theory, by the Narrative Economics’ and Behavioral Economics perspectives. The hypothesis that will be analyzed is that in a keynesian uncertainty scenario, economic agents tend to act according to their context (social, geographic, historic, cultural) spreading narratives by which they identify themselves and orient decisions that cause sensible movements on the economic aggregates. Revisiting the literature, we could conclude that by bringing together the behavioral economy and the narrative economy theory, we could, from the Keynes’ insights on his writings, perceive strong empirical evidence that can be analytically important on the assessment of the economic fluctuations.

JEL Classification: B50.

National, democratic and social: Chilean developmentalism during radical governments
Julia Veiga Vieira Mancio Bandeira, Pedro Perfeito da Silva
Brazilian Journal of Political Economy

The first Chilean developmental experience occurred during the fourteen years (1938-1952) of democratic governments of the Radical Party. This party, despite being composed by the middle classes, had the social question and the reduction of external dependence as central concerns. Thus, the aim of this article is to understand the specificities of Developmental and Radical governments in Chile, starting from the argument that they pursued, simultaneously, the construction of a national, democratic and social development. To do so, the concept of developmentalism itself will be explored to analyze the economic policy of the period.

JEL Classification: N16; O10; O20.

The conceptual evolution of inequality and poverty in economic thought
André Roncaglia de Carvalho, Luciana Rosa de Souza
Brazilian Journal of Political Economy

This is a historical reading of economic ideas about the problem of inequality and poverty. Based on the reflections of David Ricardo, the trajectory of economists’ concerns with the topic is explored, in an attempt to demarcate the phases in which the profession’s attention focused on one aspect of the problem of social justice, as well as its causes. and its effects on the behavior of individuals and the economy. In particular, attention is paid to the sensitivity of the research agenda to the various historical contexts, as well as to methodological and technological innovations. The research agenda is predominantly marked by a focus on functional income distribution until the 1980s, when poverty became the center of attention, motivating the development of methods of personal income distribution (size distribution). It offers a panoramic and non-linear reinterpretation of economic ideas about inequality and poverty, a theme that has been gaining increasing importance in the analytical developments of the economy in the last 15 years, in which the problem of concentration of wealth has gained more elaborate outlines, opening a new front of investigations on social justice and the role of public policy.

JEL Classification: B11.

Unionism, productive restructuring and finance capitalism
Janaína de Oliveira, Maria Chaves Jardim, Sidney Jard da Silva
Brazilian Journal of Political Economy

The article is part of contemporary discussions that challenge economic sociology and the sociology of work to reflect on a new socioeconomic phenomenon: the arrival of trade unionists in the financial market, through creation and, above all, the management of pension funds. Social actors of the construction of this new financial phenomenon, unionists come to (re)signify not only their strategies, but also their speeches, adding moral and social questions to the interests of the market. The work demonstrates that using the logic of capitalism itself in the fight against financialization of the economy and the productive restructuring would be the new ethos of Brazilian unionism.

JEL Classification: J51.