Why developing countries should not incur foreign debt: the Brazilian experience
Autor(a) principal: | |
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Data de Publicação: | 2016 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional do FGV (FGV Repositório Digital) |
Texto Completo: | http://hdl.handle.net/10438/17096 |
Resumo: | What we should learn from foreign debt is, essentially, that developing countries should not get indebted in foreign money. Not only because foreign debt leads countries cyclically to balance of payment financial crises and are constrained to long and painful restructuring. Principally because, contrary to conventional wisdom, the current account deficits and its financing, even if made by foreign direct investments, in most cases do not promote but hinder economic growth, in so far that they incite consumption, not investment. Something often forgotten is that to a current account deficits corresponds an overvalued currency, which makes the business enterprises in the country utilizing technology in the world state of the art non competitive, and, so, discourages investment. In consequence, we observe in developing countries a high rate of substitution of foreign for domestic savings. Instead of recurring to foreign indebtedness, developing countries should develop domestic financial institutions to finance investment |
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Bresser-Pereira, Luiz CarlosMoreira, Thiago de MoraesEscolas::EESP2016-09-20T17:36:39Z2016-09-20T17:36:39Z2016TD 427http://hdl.handle.net/10438/17096What we should learn from foreign debt is, essentially, that developing countries should not get indebted in foreign money. Not only because foreign debt leads countries cyclically to balance of payment financial crises and are constrained to long and painful restructuring. Principally because, contrary to conventional wisdom, the current account deficits and its financing, even if made by foreign direct investments, in most cases do not promote but hinder economic growth, in so far that they incite consumption, not investment. Something often forgotten is that to a current account deficits corresponds an overvalued currency, which makes the business enterprises in the country utilizing technology in the world state of the art non competitive, and, so, discourages investment. In consequence, we observe in developing countries a high rate of substitution of foreign for domestic savings. Instead of recurring to foreign indebtedness, developing countries should develop domestic financial institutions to finance investmentengCambridge University PressEESP - Textos para Discussão;TD 427Brazilian economyEconomiaEconomia - BrasilWhy developing countries should not incur foreign debt: the Brazilian experienceinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlereponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVinfo:eu-repo/semantics/openAccessTEXTTD 427 - Luiz Carlos Bresser Pereira.pdf.txtTD 427 - Luiz Carlos Bresser Pereira.pdf.txtExtracted texttext/plain45574https://repositorio.fgv.br/bitstreams/5d23594b-1f67-4b44-a0a4-2b28cc826f20/downloadcf1ddf0acf30b58ceaf81bb363834ab2MD57ORIGINALTD 427 - Luiz Carlos Bresser Pereira.pdfTD 427 - Luiz Carlos Bresser 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dc.title.por.fl_str_mv |
Why developing countries should not incur foreign debt: the Brazilian experience |
title |
Why developing countries should not incur foreign debt: the Brazilian experience |
spellingShingle |
Why developing countries should not incur foreign debt: the Brazilian experience Bresser-Pereira, Luiz Carlos Brazilian economy Economia Economia - Brasil |
title_short |
Why developing countries should not incur foreign debt: the Brazilian experience |
title_full |
Why developing countries should not incur foreign debt: the Brazilian experience |
title_fullStr |
Why developing countries should not incur foreign debt: the Brazilian experience |
title_full_unstemmed |
Why developing countries should not incur foreign debt: the Brazilian experience |
title_sort |
Why developing countries should not incur foreign debt: the Brazilian experience |
author |
Bresser-Pereira, Luiz Carlos |
author_facet |
Bresser-Pereira, Luiz Carlos Moreira, Thiago de Moraes |
author_role |
author |
author2 |
Moreira, Thiago de Moraes |
author2_role |
author |
dc.contributor.unidadefgv.por.fl_str_mv |
Escolas::EESP |
dc.contributor.author.fl_str_mv |
Bresser-Pereira, Luiz Carlos Moreira, Thiago de Moraes |
dc.subject.por.fl_str_mv |
Brazilian economy |
topic |
Brazilian economy Economia Economia - Brasil |
dc.subject.area.por.fl_str_mv |
Economia |
dc.subject.bibliodata.por.fl_str_mv |
Economia - Brasil |
description |
What we should learn from foreign debt is, essentially, that developing countries should not get indebted in foreign money. Not only because foreign debt leads countries cyclically to balance of payment financial crises and are constrained to long and painful restructuring. Principally because, contrary to conventional wisdom, the current account deficits and its financing, even if made by foreign direct investments, in most cases do not promote but hinder economic growth, in so far that they incite consumption, not investment. Something often forgotten is that to a current account deficits corresponds an overvalued currency, which makes the business enterprises in the country utilizing technology in the world state of the art non competitive, and, so, discourages investment. In consequence, we observe in developing countries a high rate of substitution of foreign for domestic savings. Instead of recurring to foreign indebtedness, developing countries should develop domestic financial institutions to finance investment |
publishDate |
2016 |
dc.date.accessioned.fl_str_mv |
2016-09-20T17:36:39Z |
dc.date.available.fl_str_mv |
2016-09-20T17:36:39Z |
dc.date.issued.fl_str_mv |
2016 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
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article |
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dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10438/17096 |
dc.identifier.sici.none.fl_str_mv |
TD 427 |
identifier_str_mv |
TD 427 |
url |
http://hdl.handle.net/10438/17096 |
dc.language.iso.fl_str_mv |
eng |
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eng |
dc.relation.ispartofseries.por.fl_str_mv |
EESP - Textos para Discussão;TD 427 |
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info:eu-repo/semantics/openAccess |
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openAccess |
dc.publisher.none.fl_str_mv |
Cambridge University Press |
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Cambridge University Press |
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