Scielo RSS <![CDATA[Latin american journal of economics]]> http://www.scielo.cl/rss.php?pid=0719-043320110002&lang=es vol. 48 num. 2 lang. es <![CDATA[SciELO Logo]]> http://www.scielo.cl/img/en/fbpelogp.gif http://www.scielo.cl <![CDATA[TWO CENTURIES OF ECONOMIC GROWTH: <b>LATIN AMERICA AT ITS BICENTENNIAL CELEBRATION</b>]]> http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200001&lng=es&nrm=iso&tlng=es On December 2010, five research teams gathered in Santiago, Chile, to discuss the growth experiences of Argentina, Chile, Colombia, Mexico and Venezuela since independence from Spain was declared in 1810. The five teams answered an invitation from the editors of the Latin American Journal of Economics to explain why these countries' growth experiences lag so far behind those of the developed world, and at the same time, why their trajectories have been so dissimilar. This paper serves as an introduction to the special issue, characterizing the patterns of growth in Latin America, and discussing the teams' answers. <![CDATA[THE ARGENTINE ECONOMY AFTER TWO CENTURIES]]> http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200002&lng=es&nrm=iso&tlng=es We document the behavior of income per capita in Argentina subsequent to independence and the civil wars of the mid-19th century. We first decompose the data to isolate low frequency behavior and show that, with significant departures over some periods of time, income per capita grew, on average, at 1. 2% per year . The decomposition shows that the largest departure from this behavior is the period from 1974 to 2010, when there was a large and sustained deviation from the trend, with two subperiods of rapid convergence . Using a simple version of Solow's growth model as a conceptual framework, we focus our analysis on that particular period . We calibrate and simulate the model from 1950 onwards and use its predictions to provide a quantitative measure of the extremely poor performance of the Argentine economy since 1974. We also use a simple model of the government budget constraint to account for the macroeconomic history of Argentina during that same period . We argue that the systematic mismanagement of government budgets is the principal reason for Argentina's long departure from the trend The two subperiods of rapid convergence coincide with the two subperiods of macro fiscal discipline. <![CDATA[A UNIFIED GROWTH MODEL FOR INDEPENDENT CHILE]]> http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200003&lng=es&nrm=iso&tlng=es This article analyzes long-term patterns of growth of the Chilean economy. Examining 200 years of data, it shows evidence in favor of using a neoclassical growth model to conduct the empirical analysis. It presents a formal analysis of structural breaks in the Chilean growth process, finding structural changes in 1929 and 1971/1981. A further analysis of the country's economic history indicates that fiscal policy, external shocks and trade policy are plausible explanations for these breaks. When these variables are included in the empirical model, the hypothesis of no breaks during these 200 years cannot be rejected. <![CDATA[TWO HUNDRED YEARS OF COLOMBIAN ECONOMIC GROWTH: <b>THE ROLE OF TFP</b>]]> http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200004&lng=es&nrm=iso&tlng=es Using modern growth theory, we estimate Colombian total-factor productivity relative to the United Kingdom's for the last 200 years in order to match observed income differences. Our results show Colombia's remarkably inefficient use of technology relative to a country that is a leader in this regard and provide quantitative estimates of the proximate causes of relative income differences between the two economies. <![CDATA[VENEZUELA'S GROWTH EXPERIENCE]]> http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200005&lng=es&nrm=iso&tlng=es The standard of living, measured as gross domestic product (GDP) per capita, increased dramatically in Venezuela relative to that of the United States from 20 percent in 1920 to 90 percent in 1958, but since then has collapsed to around 30 percent nowadays. What explains these remarkable growth and collapse episodes? Using a standard development accounting framework, we show that the growth episode is mainly accounted for by an increase in capital accumulation and knowledge transfer associated with the foreign direct investment in the booming oil industry. The collapse episode is accounted for equally by a fall in total factor productivity and in capital accumulation. We analyze Venezuela during the collapse episode in the context of a model of heterogeneous production units were policies and institutions favour unproductive in detriment of more productive activities. These policies generate misallocation, lower TFP, and a decline in capital accumulation. We show in the context of an heterogeneous-establishment growth model that distortionary policies can explain a large portion of the current differences in TFP, capital accumulation, and income per capita between Venezuela and the United States. <![CDATA[CATCH-UP GROWTH FOLLOWED BY STAGNATION: <b>MEXICO, 1950-2010</b>]]> http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000200006&lng=es&nrm=iso&tlng=es In 1950 Mexico entered an economic takeoff and grew rapidly for more than 30 years. Growth stopped during the crises of 1982-1995, despite major reforms, including liberalization of foreign trade and investment. Since then growth has been modest. We analyze the economic history of Mexico 1877-2010. We conclude that the growth 1950-1981 was driven by urbanization, industrialization, and education and that Mexico would have grown even more rapidly if trade and investment had been liberalized sooner. If Mexico is to resume rapid growth-so that it can approach U.S. levels of income-it needs further reforms.