This paper shows how rapid privatization and liberalization of Iceland's small local banks around 2000, combined with well-developed crony relations among the elite, enabled a small group of financiers to leverage government-guaranteed deposits into a vast wave of mergers and acquisitions abroad, and redistribute enough of the profits back home to make the economy boom. Negative policy feedback loops were systematically undermined. The incoming left-wing government, with IMF support, has managed to protect the bulk of the population from the worst of the effects.

JEL Classification: E5.

Financial liberalization, macroeconomic policy and economic growth within the BRIC’s countries. The objective of this paper is to analyze the relationship between exchange rate regime, capital account convertibility and economic growth in 1990-2007 period within the emerging countries that constitute what has been called BRIC – Brazil, Russia, India and China. Our hypothesis is that economic performance of these countries is the result, at least partially, of the quality of the macroeconomic policy management adopted in each country, in which exchange rate policy, capital account convertibility and the degree of external vulnerability plays a key role.

JEL Classification: E58; F31; F32; F34.

This paper analyzes the Brazilian growth pattern during the post-liberalization period, emphasizing the structural links between finance and productive capital accumulation. The results indicate a finance-led growth regime in the period 2004-2008, under a very specific financialization process. The first part is a survey of the international literature, which defines the financialization concept and its relevance for understanding Brazilian economic problems. The next part provides a historical overview on the structural changes that made possible the development of financial-led regimes. The paper also applies an empirical analysis of some ed Brazilian macroeconomic indicators.

JEL Classification: E44; O11; N26.

The conventional argument favoring capital controls elimination is based on the predictions from the neoclassical model: free international capital mobility would allow capital flows from country where capital is abundant to countries where capital is scarce and the outcome in a global perspective is efficient allocation of savings and income convergence. Within this perspective, financial integration would be particularly beneficial for developing countries resulting in external savings import, temporary increase in per capita GDP growth rate and a permanent increase in the per capita GDP level. Using data for a sample of 105 countries from 1980 to 2004 the evidences show that capitals flows from developing to developed countries and that international financial integration and external savings do not increase the conditional convergence rate.

JEL Classification: F33; F36; F43.

This paper aims to analyze the elements of continuity and discontinuity in American foreign policy from the nineties. In this regard, it emphasizes the importance of financial issues within the scope of the U.S. government strategies for foreign integration and tries to analyze comparatively the Republicans and Democrats government of the period, ending with some prospective questions concerning the Democratic government of President Obama in the context of international economic crisis.

JEL Classification: F50.

 This study analyzes the long run equilibrium relationship and causality between economic growth and public expenditure in Brazil covering the period 1980-2008. The empirical results of the Granger causality test in a multivariate framework have shown up the importance of public investments not only to face the adverse effects of the international financial crisis, but also in stimulating the economic growth. Also, the results indicate the need of controlling the growing path of other current expenditure, social security and public debt.

JEL Classification: C32; E62; F43; H11; H50.

 SUDENE is the Brazilian federal Agency for northeast development. The Agency was recreated last year and this article discusses the possibility of its success. The main point argued here is that financial incentives per se are not the best way for a sustained economical and social progress. It is necessary a change in the institutions which maintain the status quo of the underdevelopment. The article shows the SUDENE history and the motives of its failure.

JEL Classification: R58; D02.

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In the first workshop held in São Paulo, in May 24-25, 2010, the Ten Theses on New Developmentalism were originally discussed. Following, is the document that accompanied the invitation of the participants.

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The papers presented to the second workshop close this special section of the Brazilian Journal of Political Economy on the Ford Foundation / Getulio Vargas Foundation project “Growth with Financial Stability and New Developmentalism”. The third and last phase of the project will be the March 24-25 conference in São Paulo.

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