INCOME DISTRIBUTION AND PATTERN OF SPECIALIZATION IN OPEN ECONOMIES

ARIEL DVOSKIN; GERMAN FELDMAN

Investigación Económica

Universidad Autónoma de México

Lugar: Mexico; Año: 2020

0185-1667

In this paper we show that the positive connection between exchange rate undervaluation and structural change postulated by several unorthodox economists in recent times depends on very specific assumptions, which prevent their conclusions from being sufficiently general. To this aim, we examine the interaction among distributive variables under three different productive structures: price-taking economies that produce tradable industrial goods, price-taking countries that produce a primary good under differential rent and, finally, price-making countries. In view that the interaction among distributive variables is a priori indeterminate, we conclude that devaluation should be very carefully considered before this policy is recommended to induce structural change.