IDEAS home Printed from https://ideas.repec.org/a/ecr/col070/11501.html
   My bibliography  Save this article

Macroeconomy for development: countercyclical policies and production sector transformation

Author

Listed:
  • Ocampo, José Antonio

Abstract

The argument that I will be making here is that the key to a well-designed macroeconomic policy for development is a mix of sound countercyclical policies and a proactive strategy for diversifying production structures. These two concepts are deeply rooted in eclac thinking. Countercyclical policies must withstand the challenges posed by abrupt external financing cycles and sharp fluctuations in commodity prices. Fiscal policy is of pivotal importance, but it must be coupled with equally countercyclical monetary and exchange-rate policies. In the light of the experience over the past decade, this policy mix seems to be achievable if intermediate exchange regimes are introduced alongside macroprudential policies, including regulation of capital flows. At the same time, the strategy used to spur the development of the production sector should foster innovative economic activities that generate domestic production linkages. The concept of innovation must be understood in a broad sense, but the critical test is its contribution to the accumulation of technological capabilities.

Suggested Citation

  • Ocampo, José Antonio, 2011. "Macroeconomy for development: countercyclical policies and production sector transformation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
  • Handle: RePEc:ecr:col070:11501
    Note: Includes bibliography
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/11501
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. -, 2007. "Economic growth with equity: challenges for Latin America," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1935 edited by Eclac.
    2. -, 2000. "Equity, development and citizenship," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 14969 edited by Eclac.
    3. -, 2003. "From capital surges to drought: seeking stability for emerging economies," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1783 edited by Eclac.
    4. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2005. "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 11-82, National Bureau of Economic Research, Inc.
    5. Charles P. Kindleberger & Robert Z. Aliber, 2005. "Manias, Panics and Crashes," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-62804-5, October.
    6. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1993. "Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors," IMF Staff Papers, Palgrave Macmillan, vol. 40(1), pages 108-151, March.
    7. Agosin, Manuel R. & Huaita, Franklin, 2012. "Overreaction in capital flows to emerging markets: Booms and sudden stops," Journal of International Money and Finance, Elsevier, vol. 31(5), pages 1140-1155.
    8. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    9. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    10. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    11. Ricardo Hausmann & Lant Pritchett & Dani Rodrik, 2005. "Growth Accelerations," Journal of Economic Growth, Springer, vol. 10(4), pages 303-329, December.
    12. Stiglitz, Joseph & Ocampo, Jose Antonio & Spiegel, Shari & Ffrench-Davis, Ricardo & Nayyar, Deepak, 2006. "Stability with Growth: Macroeconomics, Liberalization and Development," OUP Catalogue, Oxford University Press, number 9780199288144.
    13. Krugman, Paul & Taylor, Lance, 1978. "Contractionary effects of devaluation," Journal of International Economics, Elsevier, vol. 8(3), pages 445-456, August.
    14. Agosin, Manuel R., 2007. "Trade and growth: why Asia grows faster than Latin America," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1940.
    15. -, 1990. "Changing production patterns with social equity: the prime task of Latin American and Caribbean development in the 1990s," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37869 edited by Eclac.
    16. Svensson, Lars E. O., 2000. "Open-economy inflation targeting," Journal of International Economics, Elsevier, vol. 50(1), pages 155-183, February.
    17. José Antonio Ocampo, 2009. "Latin America and the global financial crisis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(4), pages 703-724, July.
    18. Ffrench-Davis Ricardo, 2010. "Latin America: The Structural Fiscal Balance Policy in Chile: A Move Toward Counter-Cyclical Macroeconomics," Journal of Globalization and Development, De Gruyter, vol. 1(1), pages 1-16, January.
    19. Cimoli, Mario & Dosi, Giovanni & Stiglitz, Joseph E. (ed.), 2009. "Industrial Policy and Development: The Political Economy of Capabilities Accumulation," OUP Catalogue, Oxford University Press, number 9780199235278.
    20. Ocampo, José Antonio, 2011. "Macroeconomy for development: countercyclical policies and production sector transformation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    21. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    22. Mr. Ferhan Salman & Miss Mali Chivakul & Mr. Ricardo Llaudes, 2010. "The Impact of the Great Recession on Emerging Markets," IMF Working Papers 2010/237, International Monetary Fund.
    23. -, 1990. "Changing production patterns with social equity: the prime task of Latin American and Caribbean development in the 1990s," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37869 edited by Eclac, May.
    24. Ocampo, José Antonio, 2005. "La búsqueda de la eficiencia dinámica: dinámica estructural y crecimiento económico en los países en desarrollo," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1876.
    25. Ricardo Ffrench-Davis & José Luis Machinea (ed.), 2007. "Economic Growth with Equity," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-80091-5, October.
    26. -, 2000. "Equity, development and citizenship," Documentos de posición del período de sesiones de la Comisión 14969, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    27. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
    28. Katz, Jorge, 2001. "Structural reforms, productivity and technological change in Latin America," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2277 edited by Eclac, May.
    29. Ocampo, Jose Antonio & Ros, Jaime (ed.), 2011. "The Oxford Handbook of Latin American Economics," OUP Catalogue, Oxford University Press, number 9780199571048.
    30. Joseph E. Stiglitz, 1999. "More instruments and broader goals: moving toward the post-washington consensus," Brazilian Journal of Political Economy, Center of Political Economy, vol. 19(1), pages 94-120.
    31. Jeffrey A. Frankel & George Saravelos, 2010. "Are Leading Indicators of Financial Crises Useful for Assessing Country Vulnerability? Evidence from the 2008-09 Global Crisis," NBER Working Papers 16047, National Bureau of Economic Research, Inc.
    32. Ocampo, José Antonio & Parra-Lancourt, Mariángela, 2010. "The terms of trade for commodities since the mid-19th century," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 28(1), pages 11-43, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. -, 2014. "International trade and inclusive development: Building synergies," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37040 edited by Eclac.
    2. Alberto Botta & Giuliano Toshiro Yajima & Gabriel Porcile, 2023. "Structural change, productive development, and capital flows: does financial “bonanza” cause premature deindustrialization?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 433-473.
    3. Guadagno, Francesca, 2016. "The determinanths of industrialisation in developing countries, 1960-2005," MERIT Working Papers 2016-031, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Mercedes Marcó del Pont, 2013. "Introduction: the role of central banks in economic development with an emphasis on the recent Argentinean experience," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(3), pages 267-272, January.
    5. José Antonio Ocampo, 2012. "The Development Implications of External Integration in Latin America," WIDER Working Paper Series wp-2012-048, World Institute for Development Economic Research (UNU-WIDER).
    6. -, 2014. "International trade and inclusive development: Building synergies," Colección "La hora de la Igualdad", Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37040 edited by Eclac, September.
    7. repec:unu:wpaper:wp2012-48 is not listed on IDEAS
    8. Raúl Vázquez López, 2016. "Do Technology-Intensive Activities Drive Industrial Labor Productivity Levels?," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 123-150, November.
    9. Fernández Tucci, Candelaria, 2023. "Original sin and South-South cooperation: Insights for the Mercosur from the experience of the Asian Bond Market Initiative," IPE Working Papers 214/2023, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    10. Botta, Alberto & Spinola, Danilo & Yajima, Giuliano & Porcile, Gabriel, 2023. "Pasinetti, Debt Sustainability and (Green) Structural Change at the Time of Global Finance: An Emerging and Developing Countries’ Perspective," CAFE Working Papers 25, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    11. Ocampo, José Antonio, 2011. "Macroeconomy for development: countercyclical policies and production sector transformation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    12. -, 2012. "Structural change for equality: an integrated approach to development. Thirty-four session of ECLAC. Summary," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 13535 edited by Eclac.
    13. Bertranou, Fabio & Casali, Pablo & Velasco, Juan Jacobo, 2018. "The future of social protection in Latin America in a context of accelerated changes," MPRA Paper 90282, University Library of Munich, Germany.
    14. Abdo, Tarek & Cipoletta Tomassian, Georgina, 2022. "Development bank financing in the context of the COVID-19 crisis in Latin America and the Caribbean," Financiamiento para el Desarrollo 47882, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    15. Ricardo FFRENCH-DAVIS, 2012. "Employment and real macroeconomic stability: The regressive role of financial flows in Latin America," International Labour Review, International Labour Organization, vol. 151(1-2), pages 21-41, June.
    16. Ocampo, José Antonio, 2012. "The Development Implications of External Integration in Latin America," WIDER Working Paper Series 048, World Institute for Development Economic Research (UNU-WIDER).
    17. -, 2012. "Structural change for equality: an integrated approach to development. Thirty-four session of ECLAC. Summary," Documentos de posición del período de sesiones de la Comisión 13535, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean Pierre Allegret, 2012. "Responses of Monetary Authorities in Emerging Economies to International Financial Crises: What Do We Really know?," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 3-32.
    2. Ricardo FFRENCH-DAVIS, 2012. "Employment and real macroeconomic stability: The regressive role of financial flows in Latin America," International Labour Review, International Labour Organization, vol. 151(1-2), pages 21-41, June.
    3. Ffrench-Davis, Ricardo, 2015. "Neoestructuralismo y macroeconomía para el desarrollo," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 39629, May.
    4. José Antonio Ocampo, 2017. "Resetting the International Monetary (Non)System," Books, Red Investigadores de Economía, number 2017-11, March.
    5. Bruce N. Lehmann & David M. Modest, 1985. "The Empirical Foundations of the Arbitrage Pricing Theory I: The Empirical Tests," NBER Working Papers 1725, National Bureau of Economic Research, Inc.
    6. -, 2004. "Productive development in open economies: summary," Documentos de posición del período de sesiones de la Comisión 13094, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Akhilesh K. Verma & Rajeswari Sengupta, 2021. "Interlinkages between external debt financing, credit cycles and output fluctuations in emerging market economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(4), pages 965-1001, November.
    8. Carmen M. Reinhart & Vincent R. Reinhart, 2009. "Capital Flow Bonanzas: An Encompassing View of the Past and Present," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 5(1), pages 9-62.
    9. Ricardo Ffrench-Davis, 2012. "Empleo y estabilidad macroeconómica real: El rol de los flujos financieros en América Latina," Working Papers wp349, University of Chile, Department of Economics.
    10. Diego Bastourre & Luis Casanova & Alejo Espora, 2011. "Tipo de Cambio Real y Crecimiento: Síntesis de la Evidencia y Agenda de Investigación," Department of Economics, Working Papers 082, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    11. -, 2004. "Productive development in open economies: summary," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 13094 edited by Eclac.
    12. Machinea, José Luis & Vera, Cecilia, 2005. "Trade, Direct Investment and Production Policies," IDB Publications (Working Papers) 3691, Inter-American Development Bank.
    13. Guillermo A. Calvo, 2013. "The Mayekawa Lecture: Puzzling over the Anatomy of Crises- Liquidity and the Veil of Finance," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 31, pages 39-64, November.
    14. Guillermo Calvo, 2013. "Puzzling over the Anatomy of Crises: Liquidity and the Veil of Finance," IMES Discussion Paper Series 13-E-09, Institute for Monetary and Economic Studies, Bank of Japan.
    15. Pierre-Olivier Gourinchas & Maurice Obstfeld, 2012. "Stories of the Twentieth Century for the Twenty-First," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 226-265, January.
    16. Reinhart, Carmen M., 2019. "The curious case of the missing defaults," Journal of International Money and Finance, Elsevier, vol. 95(C), pages 272-280.
    17. Stephany Griffith-Jones, 2014. "Pour une libéralisation prudente du secteur financier : implications en matière de politique économique," Revue d’économie du développement, De Boeck Université, vol. 22(2), pages 81-112.
    18. Ffrench-Davis, Ricardo., 2010. "Macroeconomía para el empleo decente en América Latina y el Caribe," ILO Working Papers 994590693402676, International Labour Organization.
    19. Jean‐Marc B. Atsebi, 2024. "Igniting growth surges: Lessons from the past," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(2), pages 525-569, April.
    20. -, 2012. "Structural change for equality: an integrated approach to development. Thirty-four session of ECLAC. Summary," Documentos de posición del período de sesiones de la Comisión 13535, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecr:col070:11501. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.