Economy & Energy
Year IX -No 61:
 April-May
2007 
ISSN 1518-2932

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Has the Deregulation of Electricity Reached its Limit?

Liberalization, Imports and Economic Growth in Latin America

Evaluation of Emissions that Contribute to the Greenhouse Effect using the "Bottom-Up" Process of Coefficients

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seta.gif (5908 bytes)In Portuguese

 

Summary of Thesis:

Liberalization, Imports and

Economic Growth in Latin America

Marcos Souza

masouza@ecen.com

Thesis presented to the Economy Department of the University of Brasília as a partial qualification for a PhD Degree in Economy

Adviser: Prof. Maurício Barata de Paula Pinto

 Abstract

In the present study the impact of commercial liberalization – defined as a movement of commercial policy towards neutrality, liberality and opening up – on the imports flow and on economic growth (income and productivity) in 18 Latin America economies in the 1950-2004 period was analyzed.

Econometric techniques regarding temporal and panel series was used in the estimations; for establishing explanatory variables it was built a set of liberalization indexes, selected and estimated from studies and international data bases. Furthermore, series of total capital stock and by type of goods, namely machines and equipment and construction were also calculated.

Using this set of indexes that aims at representing liberalization, it was observed that all countries of the region can be considered as open in the 1990 decade. The results show that liberalization has increased the price elasticity of Brazilian imports and the imports level of Mercosul and Latin America. Likewise, assuming that the technological innovations occur mainly in rich countries and are better absorbed in more open countries (Edwards, 1992), it was verified that liberalization has positively affected the growth of Latin America countries. Considering the growth figures, it was also noticed that the total productivity of factors, that would have incorporated the effects of opening up on technological growth, has increased in the 1990s, though it remained small. Finally, it was pointed out that besides liberalization, the variables regarding capital stock of machines and equipment and of human resources, world technological growth and the technological gap in Latin American countries presented a direct relationship with economic growth in the region.

Key-words: Commercial Liberalization; Imports; Economic Growth; Latin America; Temporal Series; Panel Data

 Content

The study aims at investigating the impact of commercial liberalization on the imports flow and on the economic performance of 18 Latin American countries in the 1950-2004 period[1]. The results are presented, whenever possible, for Brazil, Mercosul[2] and Latin America[3]..The study has five chapters, including this introductory chapter and that of final considerations.

In Chapter 2 it is shown how the literature defines and measures liberalization and the problems related to the more common measures. It is also presented a set of liberalization indexes by country, taken from studies and international data bases. Therefore this chapter is the base for the two following ones, since it establishes the liberalization concept and the indexes to be adopted in the study.

The liberalization indexes are used for describing the recent liberalization process in Latin American countries, for studying the impact of liberalization on the imports flow in Latin American countries and for investigating the empiric relationship between commercial liberalization and economic growth (income and productivity).

In Chapter 3 it is analyzed the evolution of aggregated imports in Latin America. The literature is revised and the imports equation is derived using the Clarida model (1994) that takes into account issues of inter-temporal choices. It should be kept in mind that the estimates of this equation, considering the effect of commercial open up on estimates of price elasticity and income, is based on econometric techniques of temporal series and panel data.

In Chapter 4 there is a contribution to the empirical relationship between economic growth and commercial liberalization in Latin America, according to the Edwards model (1992) and using econometric techniques of panel data. Due to the unavailability of capital stock series and the importance of this variable for the explanation of economic growth, in this chapter the aggregated capital stock by type of goods, machines and equipment and construction goods, for 18 Latin American countries from 1950 to 2004 was estimated.

It is hoped that the study will contribute to the understanding of the Latin American economy. The liberalization indexes and the capital stock series will serve the purpose of being a tool for other studies. On the other hand, knowing the sensitivity of imports and economic growth vis-à-vis the explaining variables, considering the commercial liberalization, will help to understand the economic characteristics and to formulate macroeconomic policies for the countries of the region.

 Integral Version at Internet:

http://ecen.com/teses/marcossouza.pdf


[1] Due to the fact that data regarding some variables are not available, this time period will not always be covered. Actually, for most of the issues examined only the 1960-2000 period will be considered.

[2] Mercosul comprises Argentina, Brazil, Paraguay and Uruguay. Mercosul has evolved from an economic approximation process between Brazil and Argentina in the mid 80s and was started with the signature of the Asuncion Treaty, in 1991, by Argentina, Brazil, Paraguay and Uruguay. In the XXVII Meeting of the Common Market Council, that was held in December 2004 in Belo Horizonte, it was formalized the adhesion to Mercosul of Colombia, Ecuador and Venezuela as Associated States.

[3] Unless otherwise noticed, America Latin includes the following countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela.

 

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Revised/Revisado:
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