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The economics and the political economy of new-developmentalism

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  • Bresser-Pereira, Luiz Carlos

Abstract

This paper resumes new developmentalism – a theoretical framework being defined since the early 2000s to understand middle-income countries. It contains a political economy, the beginning of a microeconomics and a macroeconomics. It is originated in development economics or classical developmentalism and in post-Keynesian macroeconomics. While classical developmentalism asked for protection of the manufacturing industry, new developmentalism asks for the levelling of the playing field, which the tendency to the cyclical and chronic overvaluation of the exchange rate denies. New developmentalism is focused in the current account and the corresponding exchange rate. It offers a new theory of the determination of the exchange rate, based on the distinction between a value and a price of the foreign money, and on the tendency to the overvaluation of the exchange rate. Counterintuitively, it argues that middleincome countries do not require foreign finance, and, so, it defends that developing countries show a balanced current account, or, if it faces the Dutch disease, a current account surplus proportional to the severity of the disease.

Suggested Citation

  • Bresser-Pereira, Luiz Carlos, 2017. "The economics and the political economy of new-developmentalism," Textos para discussão 464, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    • Handle: RePEc:fgv:eesptd:464
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    References listed on IDEAS

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    1. Luiz Carlos Bresser-Pereira, 2016. "Reflecting on new developmentalism and classical developmentalism," Brazilian Journal of Political Economy, Center of Political Economy, vol. 36(2), pages 237-265.
    2. Luiz Bresser-Pereira & Paulo Gala, 2009. "Why Foreign Savings Fail to Cause Growth," International Journal of Political Economy, Taylor & Francis Journals, vol. 38(3), pages 58-76.
    3. Bresser-Pereira, Luiz Carlos, 2009. "From the national-bourgeois to the associated dependency interpretation of latin America," Textos para discussão 185, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    4. Bresser Pereira,Luiz Carlos, 2010. "Globalization and Competition," Cambridge Books, Cambridge University Press, number 9780521144537.
    5. Bresser-Pereira, Luiz Carlos, 2011. "Democracy and capitalist revolution," Textos para discussão 277, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    6. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
    7. Hirschman,Albert O., 1981. "Essays in Trespassing," Cambridge Books, Cambridge University Press, number 9780521282437.
    8. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
    9. Luiz Carlos Bresser-Pereira & Yoshiaki Nakano, 2003. "Economic growth with foreign savings?," Brazilian Journal of Political Economy, Center of Political Economy, vol. 23(2), pages 163-188.
    10. Luiz Carlos Bresser-Pereira, 2014. "Inequality and the Phases of Capitalism," Forum for Social Economics, Taylor & Francis Journals, vol. 43(3), pages 199-222, December.
    11. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    12. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. Bresser Pereira,Luiz Carlos, 2010. "Globalization and Competition," Cambridge Books, Cambridge University Press, number 9780521196352.
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