ABSTRACT

Developmental Macroeconomics: Access to Demand, the Exchange Rate and Growth offers a new approach to development economics and macroeconomics. It is a Keynesian-structuralist approach to economics applied to middle income countries that emphasizes the strategic role of demand in creating investment opportunities that are essential to economic development. It also explores crucial links between short-term full employment and financial stability with medium term growth.

While this book emphasizes the central role played by the exchange rate it does not ignore other macroeconomic prices (the interest rate, the inflation rate and the profit rate). It develops a group of concepts and models and blends them together in the model of the tendency to the cyclical overvaluation of the exchange rate in developing countries. According to this model, the exchange rate tends to be chronically overvalued. In so far that this is true the exchange rate ceases to be just a short-term problem to be treated by macroeconomics and becomes central to development economics and should be crucially oriented to manage the exchange rate and keep it competitive at the industrial equilibrium level.

The book closes with the presentation of new developmentalism – a national development strategy based on the system of models previously discussed that is both an alternative to old national-developmentalism and to liberal orthodoxy or the Washington consensus.

part I|120 pages

Growth and constraints

chapter 1|9 pages

Theoretical traditions and the method

chapter 3|11 pages

Demand-led growth

chapter 4|9 pages

Foreign constraint

chapter 5|9 pages

Value and price of the exchange rate

chapter 6|7 pages

Overvaluation and access to the markets

chapter 7|18 pages

The Dutch disease

chapter 8|10 pages

Domestic, not foreign savings

chapter 10|12 pages

Balance-of-payment crises

chapter 11|10 pages

The closing of the model

part II|59 pages

Policymaking

chapter 12|12 pages

Wage, export, or balanced-led?

chapter 13|15 pages

Neutralizing the Dutch disease

chapter 14|6 pages

Exchange rate policy

chapter 17|9 pages

Comparing and summing up