UIUC Econ 452: Week 7
UIUC Econ 452: Week 7 Econ 452
Popular in Economies of Latin America
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This 2 page Class Notes was uploaded by Laura Kunigonis on Friday March 4, 2016. The Class Notes belongs to Econ 452 at University of Illinois at Urbana-Champaign taught by Werner Baer in Spring 2016. Since its upload, it has received 21 views. For similar materials see Economies of Latin America in Economcs at University of Illinois at Urbana-Champaign.
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Date Created: 03/04/16
Econ 452 week 7 Midterm: march 15 7 pm noyes 100 Post ISI problems b) Agriculture was neglected - greater demand for food in the urban centers coupled with bad infrastructure, lead to increasing food prices (1960s) c) inefficient industries - inefficient labor, poor quality - infant industry argument: you need tariffs to protect industries d) low labor absorption - huge increase in urban population (6% a year) low employment growth (2% a year) e) regional concentration of industry - majority of industry was located in the rio de genero, Sanpaolo, belorizonte area (center south) Celso Furtado- studied regional problem of Brazil. Because of tariffs, poor north east had to buy everything from Brazil (which was expensive), Pe/Pm (terms of trade) increased. Poor part of Brazil became the victim of Prebischs center periphery 1- Country reached high income levels in the 1920s – industrial structure only complementary to export – oriented economy (ie meat packing) 2- In the 1920s export/gdp ratio averaged about 30% 3- Great depression of the 1930s resulted in the decline of the countries terms of trade by 34% 4- Import control resulted in a fall of imports of 40% 5- This helped industrial expansion: also helping was the devaluation of the currency 6- Expansion fiscal policy during depression 7- Special treaty with uk in 1933 – the Roca- Runcinam Treaty – mutual trade concessions - Argentina will get a privilege position, but will not raise barriers for British goods 8 – WWII – import difficulties spur on industrial production; Argentina stays out of the war until the last few days. The Peron Period – 1945 to 1955 1- Military coup in 1943 – Peron emerges leader in 1945 2- Argentina comes out of WWII with a large amount of reserves 3- Peron’s economic policies favored industries and workers at expense of agriculture 4- Investment in human capital Development in Latin America Many theories - Low terms of trade (prebische) - Low savings low investment (vicious cycle) - Institutional underdevelopment - Entrepreneurship by force (Schumpeter) as opposed to opportunity How to interpret? Historical Perspective Colonial system HC investment in Europe - Demand for better workforce - First: capitalists - Second: social movements Immigration and Education - Decades of immigration: advances in Education - Correlation, but is there causation? Education Investments - During WWII - Military Dictatorships - Democracy Human Capital and technology progress
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