Commodity dependence, structural reforms, and commodity trap: South America 1970-2017

Fernando Isabella ()

Brazilian Journal of Political Economy, 2024, vol. 44, issue 3, 421-441

Abstract: Commodity dependence is a long-lasting feature of South American economies,with far reaching effects in economic and social performance. This paper focuses in the interactionbetween commodity prices and real exchange rate and in its effects on productive capabilities.New-Developmentalist approach has labeled that situation as a “Dutch-Disease”. Ipropose a Balance of Payment Constraint Growth model especially designed to address somespecificities of commodity dependence that allow to theoretically analyze this issue. Empiricaltests are conducted for the period 1970-2017. It is found that price surges are damaging forproductive capabilities only in the context of the dismantling of state intervention. JEL Classification: C23; E12; 011.

Keywords: Real exchange rate; balance of payments constraint growth model; commodity- dependence (search for similar items in EconPapers)
Date: 2024
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