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I remember in a previous video on growth in countries around the world Professor Tabarrok pointed out that Argentina has experienced negligible growth rates although in the early 20th century they were one of the wealthier nations. I was wondering how influential Prebisch was in Argentina and if his protectionist viewpoints influence policy changes that dampened their growth rate.
Prebish has been obligated to emigrate from Argentina by dictators but his ideas, mainly the Imports Substitution one, are prevalent in Latin America since early 50´s of last century.
It's hard to say. You can point to Argentina having economic stagnation, but other countries under Import Substitution Industrialization (such as Mexico) did very well for several decades.
Mrs. Krichner is a big, big fan of Mr. Prebisch's ideas, although she might not be able to name the economist. Imports of Iphones, BMWs, books from Spain, Barbie dolls, etc., are forbidden in order to promote local substitutes. This WSJ article explains it very well: http://online.wsj.com/article/SB1000142405297020479110457710865394718617...
I wonder if The Great Stagnation can be a boon for commodity producing countries. In the second half of the 20th century, technology made it possible to rapidly expand supply, especially in commodities, making prices fall relative to industrialised goods - which could always diversify. One can build a better tractor and charge more for it, but when it comes to sugar or soyabeans, you can only make more. A deceleration of the pace of improvement of agricultural productivity could see demand outstripping the growth of supply, thus reversing Prebisch's and Furtado's predictions. Could technological stagnation help countries that are trying to catch up or does it harm everyone in absolute terms?
Why do you say he is wrong about industrialization. In theory a poorer country should be able to sell goods more cheaply than a richer country could make them, freeing both to concentrate on their comparative advantage and enabling both to benefit. Success in commodity export rarely seems to benefit a nation's development rather than a few landowners and rich comapnies, it seems. The returns from commodities, in any case, don't seem to me an argument against import substitution, though I agree it doesn't work, but for simpler reasons: the substitute goods have artificially high costs to the economy even if the prices are subsidized.
I'm also a little dubious as to whether they're benefiting from not engaging in capital market liberalization, considering state banking corruption leading to situations like that in the Chinese solar industry.
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