Globalization and Competition explains why some middle-income countries, principally those in Asia, grow fast while others are not successful. The author criticizes both old-style developmentalism and the economics of the Washington Consensus. He argues instead for a "new developmentalism" or third approach that builds on a national development strategy. This approach differs from the neoliberal strategy that rich nations propose to emerging economies principally on macroeconomic grounds. Developing countries face a key obstacle to growth, namely, the tendency to overvaluate foreign exchange. Instead of neutralizing it, the policy that rich countries promote mistakenly seeks growth through foreign savings, which causes additional appreciation of the national currency and often results in financial crises rather than genuine investment.
Author(s): Luiz Carlos Bresser Pereira
Edition: 1
Publisher: Cambridge University Press
Year: 2009
Language: English
Pages: 264
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Introduction......Page 9
Part I POLITICAL ECONOMY......Page 25
1 Globalization and Catching Up......Page 27
The present stage of capitalism......Page 30
Globalism......Page 42
The strategic role of the nation-state......Page 48
Neoliberal decline......Page 52
Globalization and catching up......Page 54
Commercial and fsinancial globalization......Page 57
2 The Key Institution......Page 62
Definition......Page 67
Some history......Page 71
Supply side and demand side......Page 74
The key institution......Page 79
Old developmentalism and its crisis......Page 86
Nation and nationalism......Page 94
Third discourse......Page 98
Old and new developmentalism......Page 102
New developmentalism and conventional orthodoxy......Page 107
Empirical comparison......Page 118
Appendix: regression equation......Page 129
Part II DEVELOPMENT MACROECONOMICS......Page 131
4 The Tendency of the Exchange Rate toward Overvaluation......Page 133
Exchange rates and growth......Page 135
The tendency toward overvaluation......Page 146
5 The Dutch Disease......Page 156
The concept of the dutch disease......Page 157
An economic or political problem?......Page 159
Two equilibrium exchange rates......Page 162
Neutralization......Page 167
Symptoms......Page 173
Stages......Page 177
The extended concept of the dutch disease......Page 181
Damage?......Page 183
Conclusion......Page 186
6 Foreign Savings and Slow Growth......Page 190
The policy of growth with foreign savings......Page 192
Exchange rate, wages, and profaits......Page 194
Substitution of foreign savings for domestic savings......Page 199
Empirical evidence......Page 202
The brazilian case in the 1990s......Page 206
7 Foreign Savings and Financial Crises......Page 212
Conventional explanations......Page 215
Foreign savings and nancial crises......Page 218
Empirical analysis......Page 223
Conclusion......Page 226
Conclusion......Page 228
References......Page 241
Index......Page 253
