Essays on exchange rate and economic performance

• Autor(a) principal: Hugo Carcanholo Iasco Pereira
• Data de Publicação: 2021
• Tipo de documento: Tese
• Idioma: eng
• Título da fonte: Repositório Institucional da UFMG
• Texto Completo: http://hdl.handle.net/1843/36802
• topic: Real Exchange Rate; Kaldorian Growth Theory; Economic Performance; Cambio; Desenvolvimento econômico; Economia

This thesis seeks to investigate the effects of pursuing a competitive real exchange rate on economic performance. The thesis is compounded by six essays. The first essay, “Kaldorian Growth Models: a critical discussion”, aims to comprehend how the Kaldorian models understand the influence of real exchange rate on growth. In light of the discussion about the limited comprehension of Thirlwall’s law (the benchmark of this tradition) about the impact of pursuing a competitive real exchange rate, the second essay, “Endogenous Productivity Regime and the Impact of Devaluations of Real Exchange Rate on Economic Growth”, develops a model of cumulative and circular causation, endogenizing the productivity regime in relation to the technological progress induced by a competitive real exchange rate. The third essay, “Exchange Rate and Growth: empirical evidence (1995-2018)”, provides empirical evidence about the influence of a competitive real exchange rate on the long-run performance. The fourth essay, “Exchange Rate and Structural Change: a study using aggregated and sectoral data”, studies whether pursuing a competitive real exchange rate influences the sectoral composition of economies in aggregated and sectoral perspectives. The fifth essay, “Exchange Rate and Prices: an extended Kaleckian approach for Brazilian manufacturing sectors (2010-2019)”, provides a simple theoretical model and a succession of time series regressions to study the inflationary effects of pursuing a competitive real exchange rate for the manufacturing sectors of the Brazilian economy. The sixth essay, “Real Exchange Rate and Growth: identifying transmission channels”, investigates some possible channels through which the real exchange rate influences growth. The thesis’ theoretical results point out that pursuing a competitive real exchange rate (possibly) spurs the growth of economies under profit- (wage-) led regime of demand/capital accumulation via changes in demand and in technological progress. In a nutshell, the empirical results suggest that the real exchange rate is not neutral in promoting the long-run growth. Furthermore, the results also indicate that the real exchange rate is linked with changes in productive structure, in the composition of national income in terms of consumption and investment/saving, and the economic efficiency in terms of social capability and Total Factor Productivity. However, the shreds of evidence suggest that pursuing a competitive real exchange rate produces social costs by increasing inflation and a worsening (improving) functional (personal) income distribution.