Abstract

DVOSKIN, Ariel  and  FELDMAN, Germán David. Income Distribution and Pattern of Specialization in Open Economies. Inv. Econ [online]. 2020, vol.79, n.313, pp.7-30.  Epub Jan 22, 2021. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2020.313.76063.

In this paper we show that the positive connection between exchange rate undervaluation and structural change postulated by several unorthodox economists in recent times depends on very specific assumptions, which prevent their conclusions from being sufficiently general. To this aim, we examine the interaction among distributive variables under three different productive structures: Price-taking economies that produce tradable industrial goods, price-taking countries that produce a primary good under differential rent and, finally, price-making countries. In view that the interaction among distributive variables is a priori indeterminate, we conclude that devaluation should be very carefully considered before this policy is recommended to induce structural change.

Keywords : Exchange rate; income distribution; price taking country; price making country- structural change.

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