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On the Costs of Inward-Looking Development: Price Distortions, Growth, and Divergence in Latin America

Published online by Cambridge University Press:  03 March 2009

Alan M. Taylor
Alan M. Taylor
Affiliation:
Assistant Professor, Department of Economics, Northwestern University, 2003 Sheridan Road, Evanston, IL 60208-2600, a Faculty Research Fellow at the National Bureau of Economic Research, and a National Fellow at the Hoover Institution, Stanford University, in 1997/98.
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Abstract

From the 1930s to the 1980s, economic policies in Latin America epitomized the inward-looking model of development. The model emerged in the Depression, and was later codified in unorthodox economic theories. Even though economic performance was seen as disappointing by the 1960s, the distortions persisted and worsened into the 1970s and 1980s. This article examines the costs of distortions and explores the structural differences between growth dynamics in Latin America and elsewhere. Distortions had profound effects on many aspects of the growth process, help explain divergent development, and raise important questions about economic growth and the evolution of institutions.

Type
Articles
Information
The Journal of Economic History , Volume 58 , Issue 1 , March 1998 , pp. 1 - 28
Copyright
Copyright © The Economic History Association 1998

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