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Latin American Econ
Midterm 1
23
Economics
Undergraduate 4
02/05/2013

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Cards

Term
Dualism
Definition
When countries grow, the rich often become richer and the poor more destitute in the process of change; simultaneous existence of modern and traditional economies
Term
Human Development includes:
Definition
productivity, equity, sustainability, and empowerment
Term
Planning Model
Definition
accorded a strong role to the state in promoting development (50's and 60's)
Term
Dependency Theory
Definition
State intervention was critical to promoting development; orchestrate growth process; without interventionist state, markets would not spontaneously generate growth

PAUL BARAN: center defines the rules/periphery were pawns in the international pursuit of profit. rich extracted resources from the poor; local elites formed alliances with foreign capitalists, preventing more growth
Term
Structuralists
Definition
economists who believed that the particular structure of developing economies warranted a different policy approach; balancing hand of the state

RAUL PREBISH: periphery countries traded primary products for more advanced products-->declining terms of trade
Term
Neoclassical/Chicago School/Orthodox
Definition
market is at the center of the development equation; ensure that economic agents face accurate price incentives without interference; state-led activity has a poor performance record
Term
Institutionalist tradition
Definition
strong role to non market institutions; rather than relying solely on price signals, other forms of organization may intervene-->legal social political systems
Term
Encomienda system
Definition
Monopoly over mines and land accorded to a "manager" or cacique with a share of output owed in return
Term
Repartida
Definition
the share of output owed to the spanish crown under the encomienda system
Term
Latifundia
Definition
the feudal hacienda estates in Latin America (fazenda in Brazil)
Term
Minifundia
Definition
small parcels of land that peasants farmed (subsistence farming)
Term
Golden Age of primary product exports
Definition
late 1800s to early 1900s, primary products were needed as the rest of the world industrialized; invested entirely in a few products, rather than industrialized
Term
Dutch Disease
Definition
the distorted pattern of development precariously predicated on a hot commodity; international resources are drawn in, overvaluing the exchange rate and encouraging investment in the commodity; boom and bust
Term
Engel's law
Definition
as income increases there is a weak increase in the demand for primary products; leads to declining terms of trade
Term
declining terms of trade
Definition
price of primary goods falls relative to manufactured goods; fewer exports, unable to afford manufactured goods

export more and more in order to import the same level
Term
backward/forward linkages
Definition
capital needed for production; related industries or products that use a good
Term
mandamiento
Definition
government forced communities to provide workers for the labor intensive harvest during labor shortages
Term
market failure
Definition
private enterprise's failure to produce sustainable growth...provided the rationale for state intervention
Term
economic populism
Definition
emphasized growth and redistribution of income to the neglect of internal and external constraint; accumulate debt while favoring certain industries; inflation, deficits, and external imbalances were ignored
Term
ISI tools
Definition
1) state owned enterprises
2) high tariffs
3) other tools, targeted lending, multinational support; passive monetary policy (overvalue currency)
Term
ISI--industrial policy
Definition
form state-owned firms; form missed economic enterprises; require government purchases from national firms; require firms to establish joint ventures; pressure foreign firms to increase local content
Term
ISI international instruments
Definition
tariffs; quotas on imports; exchange rate overvaluation; exchange rationing; import licenses (goods critical to industrialization process)
Term
ISI-fiscal and monetary policy
Definition
subsidies for cheap inputs such as electricity; subsidies for public transportation; tax breaks in production; preferential interest rates; accommodating monetary policy
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