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A post-kaleckian model with productivity growth and the real exchange rate applied to selected latin american countries

Douglas Alencar (), Frederico Jayme Jr () and Gustavo Britto

No 587, Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais

Abstract: This paper aims to discuss the theory of productivity growth and its empirical applications, several authors emphasize the impact of real exchange rate devaluation on productivity. The main research question is: does the real exchange rate have a positive or negative impact on productivity growth? The first step in answering this question is to discuss productivity growth in the context of demand regimes. The second step consists of an empirical experiment that estimates the productivity growth equation for a sample of Latin American countries. The overall outcome is that the Kaldor–Verdoorn coefficient is significant for all the analysed countries, Argentina, Brazil, Bolivia, Chile, Colombia, Mexico, Uruguay and Venezuela. The wage-push variable is significant for only two countries, Bolivia and Chile, indicating that in Bolivia the regime is profit-led whereas in Chile it is wage-led. Regarding the real exchange rate and this variable squared, the parameters are negative for all the countries, indicating that real exchange rate devaluation does not increase productivity growth.

Keywords: Post-Kaleckian; aggregate demand; real exchange rate; productivity; real wages. (search for similar items in EconPapers)
JEL-codes: O11 O15 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pke
Date: 2018-10
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