EconPapers    
Economics at your fingertips  
 

A New Developmentalist model of structural change, economic growth and middle-income traps

José Luís Oreiro (), Kalinka M. da Silva and Marwil Dávila-Fernández

Structural Change and Economic Dynamics, 2020, vol. 55, issue C, 26-38

Abstract: When a rapidly growing country stagnates at middle-income levels and fails to transition into a high-income economy, we say it has fallen into a middle-income trap. An original interpretation of the causes of this phenomenon was offered in recent years by the so-called Brazilian New Developmentalist School. It must be noted, however, that this approach lacks a coherent formalization of its main propositions. This article aims at filling this gap in the literature. We assess, analytically and through numerical simulations, whether the Dutch disease can be propelled by the discovery of natural resources and the adoption of an external savings growth strategy. In both cases, a class coalition between workers and rentiers leads to an overvaluation of the real exchange rate. As a consequence, inflation is kept under control while artificially increasing real wages and financial incomes. The model provides a bridge between classical development theory and demand-led growth theories, drawing on elements from both traditions.

Keywords: New developmentalism; Demand-led growth; Structural change; Exchange rates (search for similar items in EconPapers)
JEL-codes: O11 O14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0954349X20303830
Full text for ScienceDirect subscribers only

Related works:
Working Paper: A new developmentalist model of structural change, economic growth and middle-income trap (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:55:y:2020:i:c:p:26-38

DOI: 10.1016/j.strueco.2020.07.008

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-07-17
Handle: RePEc:eee:streco:v:55:y:2020:i:c:p:26-38