College aantekeningen Economy: Latin America (5182ke52y)

donderdag 14 september 2023


Lecture 1

Introduction to Latin American economic development
- what is a developed
economy:
-GDP, high levels op FDI, high
levels of industrialisation
- Depends on the country,
countries like Chile, DR have
levels of economic growth.
Countries that have low levels
of economic growth but high
levels of high levels of human
development. Eg Cuba.
- It is di cult to understand what devilment is.
- But compared to North America it lacks behind but in certain cases LA is doing
better than North America in certain elds
- There is disparity in the region between countries that have high levels in
industrialisation and those that have
more commodity export.
- LA is marked by the colonial
times.
-After they have gained
independence they were still
depended on the north and but also
because of criollo elite
- Production of LA was sluggish,
after independence they start investing.
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, -After 1930 change in
structure. Because before
were still focused on
exporting commodities. They
had an deliberate try to
industrialise. But after the
they
- They were dependent on global markets but were only exporting commodities.
So if the price drop, it was unstable,
- Imports and export were the driver of the economic growth
-First wave of globalisation. Very good
years for the souther cone.
-Tropical goods countries also
experienced a growth period.
-Comparative advantage: by
specialising the product, you make the
best by engaging in free trade.
- You can bene t even if other people make the products better than you do
- Will lead to no waste and more e ciency. And lead to less inequality and more
growth
-You might be selling bananas to buy
cars, but the cars get more expensive,
but commodities such as bananas, are
stagnating or collapsing
-They will get stuck in the commodity,
this lead to structuralism.
-LA was depended on the centre, but
they were not bene ting form the
exporting
-Terms of trade
-Even if the export were increasing, the
imports were increasing in a faster rate
-The price of commodities were
increasing at a slower rate than the
price of the imports.

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, - Lead to increasing domestic demand and lead to producing some product that
they were importing them self
- You care more for the industrial goods but the primary goods have a lot of
competition and there are a lot of suppliers and the prices are low and you do not
care for where you buy it
- Co ee went from a high value good with a high price to a commodity that was
easy to nd and cheap
-Local elites were bene ting from
commodity or commodity trap
when you depend in your economy
on one ore two products: like
Venezuela with oil
-In NL ex have bigger basket of
goods that they export and are
that dependent on one good where
if the price drops of one is not a
big deal
-If you have a commodity that is in
demand and you have it, you have
won the commodity lottery.
Avocado’s
-Guano boom in Peru, but when
chemical fertiliser came it down
-If you ride the economic wave
and do well you are dependent on
the external in uence. End LA saw
this problem and thought about
trying to be less dependent.
-But the dependency is not less.
- You can intervene, and maybe
the state can intervene in the
economy. Because economy is not
only export and import. But also
government expenditure




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-trying to have a industry that can
provide for local and international
market
-But you need capital and
technology. But is di cult to
excess. But LA was late to the
game. And thus to get excess to
technology is hard because it is
concentrated in the north.
- And excessing the capital is hard because commodity prices are still dropping
- Is the time of dictator ships. Because the elites did not want to lose there
commodities were they got their money.
- This lead to borrowing money. Because they had a trade de cits
- Time of huge investments
-Labour productivity was at
one point higher than in the
US




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