The ‘’non-universality’’ theory of economic theory

Dercio Garcia Munhoz ()

Brazilian Journal of Political Economy, 1985, vol. 5, issue 1, 19-37

Abstract: To accept that the postulates of the Economic Theory have validity in any countryis to suppose the universality of the theory. The examination of the process of cost formationin the productive system and of the income sources shows that the imposition of newcost components in the economy brings movements for income accommodation, throughthe acceleration of inflation up to a new equilibrium level. However, the new equilibriumrate will depend on three factors: the share of the new costs components in the GDP; theparticipation of the contractual income, like wages, in the GDP; and the periodicity of thecontractual income correction. These factors are different from country to country, refusingthe validity of the monetary theory supposition. This article shows that it is possible to concludeon the “non-universality” of the Economic Theory. At last, if is correct to admit thatthe larger the share of contractual incomes in the GDP more stable will be the economy, thenthe income policy would be a strategic factor for the stabilization policy when the economyis subject to cost shocks. JEL Classification: B41; P10.

Date: 1985
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