Inflation and stabilization policies in Latin America: An empirical approach into the monetarist-structuralist controversy

Guzman-Ferrer, Martin (1970) Inflation and stabilization policies in Latin America: An empirical approach into the monetarist-structuralist controversy. PhD thesis, University of Glasgow.

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The background of this work is the problem of growth - or stagnation with stability - or instability. The main interest is price instability in the context of underdevelopment. Initially the work starts with a universe, in the present case Latin America and the post-war period (1946-65). An abstraction follows, with price instability and industrialisation indicators, from the relatively stable countries of the region (Venezuela, Central America and the Caribbean). The next step is to re-state the complete relationship between the growth of output and inflation in the selected countries (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, and Uruguay). This relationship is then examined - empirically and with the aid of simple statistical tests - in terms of the causes of inflation and its policy cures. with respect to the last point - stabilisation programmes - the study is eventually reduced to certain periods in the policy-making experience of Argentina, Chile, and Peru. Resuming, this work states a general case, selects certain tools and examines, and moves into specific issues. The nature of Latin-American inflation and the search for its remedies are highly controversial subjects. Throughout the past two decades they have taken the form of what is known as the 'Monetarist-Structuralist' controversy. The controversy is an irregular intellectual body, not obviously symmetrical, theoretically ambitious, and perhaps too widespread. Still, it is the natural setting to approach the subject of inflation in these countries. Thus this work has tried to make a framework out of the controversy that lends itself to the study of the problematic. The causes of inflation are then divided according to monetarism and structuralism and studied in different chapters, although not in isolation from one another. The monetary, propagating or orthodox causes of inflation are in, the supply of money, budget deficits, and wage escalation (here the term has to be stretched). Monetarist analysis, however, has also come to give significant importance to the price instability effects of the devaluation of the exchange rate and induced supply bottlenecks; and it is very concerned with the effects of inflation on savings and investment. Structuralism is a peculiar emphasis on the cost-push causes of inflation, which simultaneously stresses changes in the growth and composition of demand. The structural or fundamental causes of inflation take the form of supply bottlenecks; foreign exchange, agricultural output, import-substitution industrialisation, and infrastructure; although importance is also given to the factor distribution of income. The Cures for inflation are again examined within the framework of the controversy. Attention is concentrated, however, on orthodox policy measures - monetary, fiscal, incomes and exchange rate - and only marginal comments are made on domestic and foreign sector structural policies. Lastly, the controversy is carried to the confrontation between structuralism end the IMF's sponsored stabilisation programmes. Special attention is given to the 'Frondizi Plan' in Argentina, the Klein Sacks Mission and the 'Alessandri Plan' in Chile; and to the IMF's stabilisation measures of 1958-1960 in Peru.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Additional Information: Adviser: Alec Nove
Keywords: Economics, Latin American studies
Date of Award: 1970
Depositing User: Enlighten Team
Unique ID: glathesis:1970-73714
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 14 Jun 2019 08:56
Last Modified: 14 Jun 2019 08:56

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