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The Inflation Controversy in Latin America: A Survey

Published online by Cambridge University Press:  24 October 2022

Werner Baer
Werner Baer*
Affiliation:
Vanderbilt University
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The questions of whether inflation is harmful or helpful or indifferent to economic growth, whether the elimination of inflation should come before or after a high rate of economic growth has been achieved, and the whole issue of what are the roots of the Latin American inflations, have preoccupied at one time or another almost every economist who has worked in the region. More than any other economic problem, inflation has aroused strong passions in otherwise reflective and technocratically inclined economists, and has compelled many to partake in what almost amounted to an ideological controversy. This experience has, on the one hand, had the effect of forcing economists to reexamine some of the basic value judgments that have been implicit in their analytical work, while, on the other hand, it has often obscured the basic analytical strand that each was following.

Type
Topical Review
Information
Latin American Research Review , Volume 2 , Issue 2 , Spring 1967 , pp. 3 - 25
Copyright
Copyright © 1967 by the University of Texas Press

References

Selected Bibliography

Baer, Werner, and Kerstenetzky, Isaac eds. 1964 Inflation and Growth in Latin America. Homewood. This volume contains the papers and the panel discussions of the conference on Inflation and Growth, held in Rio de Janeiro in January 1963. Of special relevance to the discussion in this survey are the following papers contained in this volume: Closing Remarks, by W. Arthur Lewis, 21–33; The Effect of Inflation on Economic Development, by Graeme S. Dorrance (presenting what I consider to be the lead paper of the conference on the monetarist position), 37–87; Inflation and Growth: The Heart of the Controversy, by Dudley Seers, 89–103. (representing the structuralist lead paper); Invisible Hands in Inflation and Growth, by Joseph Grunwald, 290–319; Some Notes on Inflation, by Arnold C. Harberger, 290–319; Monetarists, Structuralists, and Import-Substitution, by David Felix, 370–400.Google Scholar
Baer, Werner 1965 Industrialization and Economic Development in Brazil. Homewood. Ch. 5, The Financing of Brazil's Industrialization: Sources of Funds and the Role of Inflation. An empirical analysis is attempted here to examine the extent to which inflation acted as a mechanism of forced savings; it also contains a brief analysis of why some of the expected distortions resulting from inflation did not occur.Google Scholar
Baer, Werner, Kerstenetzky, Isaac, and Simonsen, Mario H. 1965 Transportation and Inflation: A Study of Irrational Policy-Making in Brazil. Economic Development and Cultural Change. January. An analysis of why and how the transportation deficit arose and how it contributed to inflationary forces.Google Scholar
Baer, Werner, and Simonsen, Mario H. 1965 Profit Illusion and Policy-Making in an Inflationary Economy. Oxford Economic Papers, July. An analysis of the mechanism of the emergence of illusory profits and how they can distort the allocation of resources, with examples from the Brazilian case.Google Scholar
Brown, Robert T. 1965 The “Railroad Decision” in Chile. In: Transport Investment and Economic Development. Fromm, Gary ed. Washington, D.C. An excellent essay giving the reader an idea of how Chilean railroad deficits develop. Brown discusses their inflationary impact in Baer and Kerstenetzky, op.cit., 440–443.Google Scholar
Bray, J. O. 1962 Demand and Supply of Food in Chile. Journal of Farm Economics. 44: 4. An original critic of the structuralist agricultural inelasticity hypothesis, using some Chilean data.Google Scholar
Campos, Campos Roberto de 1961 Inflation and Balanced Growth. In: Economic Development for Latin America. Ellis, Howard S., and Wallich, Henry C. eds. 82–103. London. A good example of monetarist arguments.Google Scholar
Davis, Tom E. 1963 Eight Decades of Inflation in Chile, 1879–1959: A Political Interpretation. The Journal of Political Economy. August. An excellent interpretation of the Chilean experience, evaluating various explanations of the country's inflation and various programs to control it.Google Scholar
Davis, Tom E. 1966 Inflation and Growth in Latin America: Theory, Performance, and Policy. Economic Development and Cultural Change. July. A review article on the above mentioned volume of the Rio de Janeiro inflation conference.Google Scholar
Delfim Netto, Antonio, Pastore, Affonso C., Cipollari, Pedro, and de Carvalho, Eduardo P. 1965 Alguns Aspectos Da Inflação Brasileira. São Paulo. Estudos ANPES 1. An excellent quantitative analysis of the Brazilian inflationary experience, using regression analysis to measure the influence of some key variables on the price level.Google Scholar
de la Peña, Horacio Flores 1955 La elasticidad de la oferta y el desarrollo económico. El Trimestre Económico. 22: 1:1–22. One of the original articles concerned with the inelastic supply of agricultural products.Google Scholar
Diaz Alejandro, Carlos F. 1965 Exchange-Rate Devaluation in a Semi-Industrialized Country: The Experience of Argentina, 1955–1961. Cambridge, Mass. Chs. 5 and 6 contain a first-rate analysis of the Argentine inflationary experience and various stabilization efforts.Google Scholar
Edel, Matthew D. 1965 The Adequacy of Food Production for Economic Development in Latin America. (Unpublished M.A. dissertation, Columbia University). By far the most thorough and best empirical analysis of the agricultural thesis. To be published soon.Google Scholar
Felix, David 1960 Structural Imbalances, Social Conflict and Inflation. Economic Development and Cultural Change. January. An excellent analysis of the Chilean inflationary experience and the attempts at stabilization in the fifties.Google Scholar
Georgescu-Roegen, Nicholas n.d. Structural Inflation-Lock and Economic Development. (Mimeographed). To be published in late 1967 by the Revista Brasileira de Economía and to appear in English in the Proceedings of the Córdoba Second International Congress of Economics. Mimeographed version available at request from author at Vanderbilt University.Google Scholar
Gudin, Eugenio 1962 Inflation in Latin America. In: Inflation. Hague, D. C. ed. Proceedings of a conference held by the International Economic Association. 342–358. London. Another example of typical monetarist arguments.Google Scholar
Harberger, Arnold C. 1963 The Dynamics of Inflation in Chile: In: Measurement in Economics: Studies in Mathematical Economics and Econometrics. Christ, Carl F., et al. 219–250. Stanford. Harberger's regression analysis trying to measure the influence of certain key variables on the price level.Google Scholar
Hirschman, Albert O. ed. 1961 Latin American Issues: Essays and Comments. New York. See especially the following essays: Two Views on Inflation in Latin America by Roberto de Oliveira Campos. Campos again presents essentially the monetarist case. An Alternative View of the “Monetarist-Structuralist” Controversy by David Felix is a good summary of the structuralist position. The “Structuralist” School on Price Stability and Development: The Chilean Case by Joseph Grunwald is the Chilean case viewed through structuralist eyes.Google Scholar
Hirschman, Albert O. 1958 The Strategy of Economic Development. New Haven. Ch. 9. Analysis of the Inflationary problem due to sectorial imbalances.Google Scholar
Hirschman, Albert O. 1963 Journeys Toward Progress. New York. Ch. 3., Inflation in Chile, contains an historical analysis of how Chile has tried to cope with its perennial inflationary problems at various times; it also contains a neat political-economic model on the role of outside missions in organizing politically viable stabilizaton programs.Google Scholar
Mamalakis, Markos, and Reynolds, Clark W. 1965 Essays on the Chilean Economy. Homewood. The first part of this book contains an analysis by Mamalakis on the relation of inflation to changes in the rate of return of various sectors of the economy in the growth process.Google Scholar
Maynard, Geoffrey 1961 Inflation and Growth: Some Lessons to be Drawn from the Latin American Experience. Oxford Economic Papers. June. Analysis of the Argentine and Chilean experience in the fifties, concentrating especially on fluctuations in exports and the stagnation of agricultural supplies.Google Scholar
Noyola, Juan 1956 El Desarrollo Económico y la Inflación en Méjico y Otros Paises Latinoamericanos. Investigación Económico. 4. Another of the original essays of the structuralist school.Google Scholar
Pinto, Aníbal 1960 Ni Estabilidad Ni Desarrollo—La Política del Fondo Monetario. Santiago. A leading exponent of the structuralist school.Google Scholar
Seers, Dudley 1962 A Theory of Inflation and Growth in Under-Developed Countries Based on the Experience of Latin America. Oxford Economic Papers. June. One of the best analytical synthesis of the structuralist school.Google Scholar
Simonsen, Mario H. 1964 A Experiencia Inflacionaria no Brasil. Rio de Janeiro. To be published soon in English by the Committee for Economic Development. A first-rate empirical analysis of the Brazilian inflationary experience. Excellent documentation of various distortions which appeared during the process.Google Scholar
Sunkel, Osvaldo 1958 La Inflación Chilena: Un Enfoque Heterodoxo. El Trimestre Económico. October-December. The first systematic exposition of the structuralist school.Google Scholar
United Nations, Economic Commission for Latin America 1961 Inflation and Growth. (Mimeographed, Unpublished). A six-volume study of a number of Latin American countries' inflationary experience; a rich source of data.Google Scholar