ON SOME LIMITS OF THE NEO-DEVELOPMENTALIST VIEW ABOUT THE RELATIONSHIP BETWEEN EXCHANGE RATE AND ECONOMIC GROWTH

ARIEL DVOSKIN; GERMAN FELDMAN; GUIDO IANNI

Workshop; Second New Developmentalism Workshop; 2017

São Paulo School of Economics of Getulio Vargas Foundation

The present article critically examines the transmission channels between real exchange rate and economic growth adduced by the Neo-developmentalist literature in its two main strands. It is shown that the assumptions under which the mechanisms work are highly restrictive, and hence are generally inadequate to explore the problem of development in Latin American peripheral countries. In view of this, the potential risks associated with a policy of devaluation are warned