New-Structuralist Exchange-Rate Policy and the Pattern of Specialization in Latin American Countries

CSWP 28 (February 2018)

Author Ariel Dvoskin, Germán David Feldman, and Guido Ianni

Keywords Dual economies; Economic growth; New-Structuralism; Pattern of Specialization; Real Exchange Rate

JEL B22; E11; F43

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

Download the paper