CEPAL Review

Cepal Review is the leading journal for the study of economic and social development issues in Latin America and the Caribbean. Edited by the Economic Commission for Latin America, each issue focuses on economic trends, industrialization, income distribution, technological development and monetary systems, as well as the implementation of economic reform and transfer of technology. Written in English and Spanish (Revista de la Cepal), each tri-annual issue offers approximately 12 studies and essays undertaken by authoritative experts or gathered from conference proceedings.

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The economics of demand-led growth. Theory and evidence for Brazil

This article describes the theory of demand-led growth and provides evidence that a demand-led growth regime exists in the Brazilian economy. Based on the methodology developed by Atesoglu (2002), econometric tests of this hypothesis show that almost 85% of the growth rate of real gdp in the period 1990-2005 is explained by demand-side variables, mainly exports and government consumption. As the current fiscal crisis rules out fiscal expansion, Brazil’s only option is to adopt an export-led growth model. The article also shows that the maintenance of undervalued real exchange rate is a major determinant of export growth in developing countries such as Brazil.

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