ABSTRACT OF PAPER
Exchange Rate Policy, Distributive Conflict and Structural Heterogeneity. The Argentinean and Brazilian cases
Amico, F. & Fiorito, A.
This paper is a
comparative study of monetary policy and the inflationary process in Argentina and Brazil in particular, based on the
classical approach to determination of prices and distribution. The aim is to
suggest some lines of inquiry in a specific framework for the analysis of
inflation and of its relation to macroeconomic policies and structural
heterogeneity in the Argentine’s and Brazil’s cases.
We will discuss
the inflationary processes in those developing countries that face up strong
external restrictions to development, at the light of monetary theory of
distribution. In the more general framework of the classical approach, we
introduce a specific topic belonging to these countries, like a structural
heterogeneity and its implications on macroeconomic policies and development.
The cases of Argentina and Brazil under analysis seem to suggest
that normal distribution is governed by a monetary determination, where no room
to a “natural” or “neutral money” determination is possible. The specific way
of governance in this determination is an exchange rate policy instead of an
interest rate policy. The most important issue in this context is that no
mechanical or “a priori” link can be generally claimed between the exchange
rate, interest rate and the wage rate.
unbalanced productive structure underlying the factors that influence and
constrain the Central Bank's policy and those factors are focused on exchange
rate policy. In the heart of development problems we have the central feature
of the distributive conflict between social actors in their fight for
redistributing the associated costs of the exchange rate policy impinging on
each one. These structural factors primarily govern the monetary and the
exchange rate policy and stimulate a specific form of distributive conflict.