A long tradition in economic theory has seen the real exchange rate (RER) as a key determinant of trade performance. Several empirical studies, however, have found low estimates of macro trade elasticities and, as a result, questioned this argument. In this paper, we show that to understand and estimate the effect of RER on trade performance, it is crucial to explore the existence of heterogeneous responses of individual products to RER movements. Using trade data from Argentina, we employ the Mean Group method to estimate macro trade elasticities by individual products disaggregated at four digits of the SITC; rev.2. We find a wide range of heterogeneous responses of exports and imports to RER movements at the individual product level. We find that the estimated RER-elasticities in differentiated products and labor-intensive manufacturing goods are substantially larger than those of primary and homogeneous products. Based on the estimated elasticities at the product level, we obtain a "low" aggregate RER-elasticity of exports when we weigh them by the country's trade basket. We show that this result is a consequence of Argentina's economic structure, a country whose exports are heavily specialized in primary and homogeneous products. Our results are important because they help build a bridge between two conflicting views in the RER-economic development literature. Even in countries with "low" aggregate macro RER-elasticities, the real exchange rate may be an important variable for economic performance. An undervalued RER may facilitate economic growth by stimulating investment in activities producing more complex/differentiated goods in countries that specialize in the production of primary and homogeneous goods and, as a result, have "low" trade elasticities. This seems to be the case of several countries in Latin America, including Argentina.

Abstract This paper offers a systematic survey of recent research evaluating the impact of the level and volatility of the real exchange rate (RER) on economic growth. Existing empirical work finds a positive association between RER levels and economic growth, especially in developing countries. This relationship appears to be driven by cases of overvaluation hurting and undervaluation favoring growth. RER volatility, in turn, has a negative impact on growth. Together with the review of the literature, panel growth regressions with the 9.0 version of the Penn World Table database are carried out to evaluate previous findings. The paper also surveys the literature studying the mechanisms that explain the positive growth effect of the RER. One of them emphasizes that an undervalued RER reduces macroeconomic volatility, favoring capital accumulation and growth. Another one stresses that a competitive RER stimulates capital accumulation in modern tradable activities, facilitating structural change and economic development.

While economic theory indicates that macroeconomic populism is doomed to failure, history shows that populist experiences are frequently repeated, ignoring both theory and past failures. In this article, we explore the origin of this paradox: why a strategy that is considered inconsistent and, therefore, doomed to failure, is adopted by governments? The “populist paradox” represents a challenge to general equilibrium frameworks based on purely rational behavior. Our explanation is that there are situations in which governments face a strong tension between two policy objectives: macroeconomic balance and social peace. This type of situation can be analytically characterized as a case of structural disequilibrium that occurs when there is a structural distributive conflict: a tension between social demands and the productive capacity of the economy. The economic policy strategies that prefers the objective of social peace over macroeconomic balance are what the literature calls “populist”. The repeated implementation of this type of strategies arises from the social pressure to satisfy popular demands. To illustrate and give historical background to our hypothesis, we use the Argentine economic history. As a solution to this type of conflicts, we offer some guidelines of a tentative strategy based on a social agreement that includes the possibility of trading income for equity between labor and capital.

Fueled by major disruptions in the technological landscape, a process of Schumpeterian creative destruction is underway. In the Argentine presidency, the G20 affirmed that it was fully committed to deliver the policy responses and international cooperation that will help ensure that the benefits of the technological transformation are widely shared. A special focus was put in considering individual country circumstances when analyzing challenges and benefits – particularly in emerging economies. In this policy brief, we build country-specific data from three G20 countries –and other countriesto ask to what extent Latin America is ready to reap the benefits of this revolution.

Between 2002 and 2008, Argentina experienced a phase of very high and sustained economic growth. During this period, macroeconomic policy aimed to preserve a stable and competitive real exchange rate (SCRER). There is controversy on whether the SCRER policy was a key factor fostering growth and, even more, on whether it helped promote the expansion of tradable activities and exports. We use a methodology to detect episodes of export surges among Argentina's export industries and find that labor-intensive industries-especially low- and medium-technology manufactures-experienced the highest proportion of export surges within this period. We also find that between 1980 and 2015, the highest proportion of surges in total exports occurred during the 2003-8 period. The performance of export of services was also particularly dynamic during this period. This evidence suggests that the SCRER policy was instrumental for export surges in Argentina during 2002-8.

espanolEntre 2003 y 2008, Argentina instrumento una politica que busco preservar un tipo de cambio real competitivo y estable (TCRCE). El comportamiento del tipo de cambio real durante este periodo contrasto de forma marcada respecto a los periodos previo y posterior. Fue precedido por un periodo extendido de tipo de cambio real sobrevaluado y estable, y seguida por otro de persistente apreciacion. Tan marcado contraste en el comportamiento del tipo de cambio real es util para evaluar su influencia sobre el comercio exterior. En este trabajo nos concentramos en el impacto sobre las exportaciones. Para ello, adaptamos la metodologia desarrollada por Freund y Pierola (2012) para detectar episodios de saltos exportadores (export surges) a nivel sectorial. Encontramos que durante 2003-2008 los sectores productores de bienes intensivos en mano de obra –los mas sensibles al tipo de cambio real– experimentaron un mayor porcentaje de saltos exportadores. Encontramos tambien que entre 1980 y 2015 el pico de saltos exportadores a nivel agregado ocurrio en 2003-2008. Mostramos, ademas, que la exportacion de servicios tambien fue muy dinamica durante este periodo. Tomada en conjunto, la evidencia recogida sugiere que la politica de TCRCE fue importante para la trayectoria exportadora de Argentina durante 2003-2008. EnglishBetween 2003 and 2008, Argentina experienced a phase of very high and sustained economic growth. During this period, macroeconomic policy aimed to preserve a stable and competitive real exchange rate (SCRER). There is controversy on whether the SCRER policy was a key factor fostering growth and even more on whether it helped promote the expansion of tradable activities and exports. We use an adapted methodology of Freund and Pierola (2012) to detect episodes of export surges among Argentina’s export industries. We find that labor-intensive industries—especially low and medium technology manufactures— experienced the highest proportion of export surges within this period. We also find that between 1980 and 2015, the highest proportion of surges in total exports occurred during the 2003-2008 period. The performance of export of services was also particularly dynamic during this period. This evidence suggests that the SCRER policy was instrumental for export surges in Argentina during 2003-2008.

We provide an interpretation of the macroeconomic performance of Argentina between 1930 and 2015, in which distributive conflict plays a central role. Following a tradition in the Argentine social sciences, we see a structural inconsistency between the income aspirations rooted in society and the productive capacity of the economy. We give this inconsistency a precise definition: as a gap between two equilibrium levels of the real exchange rate (RER). The macroeconomic equilibrium RER is the one that allows the economy to simultaneously attain full employment and balance of payments sustainability. The social equilibrium RER occurs when fully employed workers obtain the real wage that they bargain/claim. These two levels of RER may not coincide. There is a structural distributive conflict when the macroeconomic equilibrium RER is significantly higher than social equilibrium RER. We build a model to provide a stylized characterization of Argentina's economy and precise definitions of the two levels of RER. We then use the model to characterize macroeconomic policy and performance during the 1930-2015 period.

En este artículo brindamos una interpretación del desempeño económico argentino entre 1930 y 2015, en la que el conflicto distributivo desempeña un papel protagónico. Nuestro argumento sostiene que el conflicto surge de la inconsistencia entre las aspiraciones económicas arraigadas en la sociedad y las posibilidades productivas de la economía. Presentamos dicha inconsistencia de un modo preciso: como una divergencia entre dos niveles de equilibrio del tipo de cambio real. El tipo de cambio real de equilibrio macroeconómico es aquel que permite a la economía mantener simultáneamente el pleno empleo y un balance de pagos sostenible. El tipo de cambio real de equilibrio social es aquel que emerge cuando los trabajadores plenamente ocupados alcanzan el salario real al que aspiran. Estos niveles de tipo de cambio real pueden no coincidir. De esta manera, existe un conflicto distributivo estructural cuando el tipo de cambio real de equilibrio macroeconómico es significativamente mayor al de equilibrio social. Asimismo, desarrollamos un modelo formal que representa de modo estilizado la estructura de la economía argentina y que permite brindar una definición precisa de los dos niveles de equilibrio del tipo de cambio real y del conflicto estructural. Posteriormente, utilizamos el modelo para caracterizar sintéticamente el performance y la política económica en el periodo 1930-2015

In the debate about a possible exit of Greece from the euro area, Argentina is often referred to as an example–both by those in favour of and those warning of the adverse effects of a Grexit. Yet, while Argentina pulled off an impressive economic recovery after its 2001-02 crisis–one that goes beyond a mere commodity boom–there are important structural differences between the two countries, which still render a potential Grexit a very risky endeavour.

The purpose of this study was to evaluate the frequency of osteoporosis (OP) in patients with Gaucher disease (GD) in Argentina. GD patients from 28 centers were consecutively included from April 2012 to 2014. Bone mineral density (BMD) was determined by dual X-ray absorptiometry in the lumbar spine and the femoral neck or the total proximal femur for patients >= 20 yr of age, and by whole-body scan in the lumbar spine in patients <20 yr of age. In children, mineral density was calculated using the chronological age and Z height. OP diagnosis was determined following adult and pediatric official position of the International Society for Clinical Densitometry. A total of 116 patients were included, of which 62 (53.5%) were women. The median age was 25.8 yr. All patients received enzyme replacement therapy, with a median time of 9.4 yr. Normal BMD was found in 89 patients (76.7%), whereas low bone mass (LBM) or osteopenia was found in 15 patients (13%) and OP in 12 patients (10.3%). The analysis of the pediatric population revealed that 4 patients (9.3%) had LBM and 3 (7%) had OP (Z-score <= -2 + fractures height-adjusted by Z), whereas in the adult population (n = 73), 11 patients (15%) had LBM or osteopenia and 9 (12.3%) had OP. Bone marrow infiltration and the presence of fractures were significantly correlated with the presence of OP (p = 0.04 and <0.001, respectively). This is the first study in Argentina and in the region describing the frequency of OP or LBM in GD patients treated with imiglucerase using the official position of the International Society for Clinical Densitometry.

We analyze Argentina's macroeconomic policy and performance between 2003 and 2013. The period began with a rapid recovery following the 2001–02 crisis. Recovery then turned into strong and sustained growth. By late 2011, despite a very favorable external context, Argentina entered a stagflationary trap. Facing a visible lack of foreign exchange, the authorities introduced and reinforced a series of controls, which did not prevent a currency crisis in late 2013 and early 2014. We argue that macroeconomic performance during the whole period was closely related to the way macroeconomic policy was conducted. More specifically, we claim that the shift from high growth to stagflation was due to a change in the approach to macroeconomic policy: from one aiming to preserve a stable and competitive real exchange rate and twin surpluses, to another one of populist orientation.

We provide an interpretation of the macroeconomic performance of Argentina between 1930 and 2015, in which distributive conflict plays a central role. Following a tradition in the Argentine social sciences, we see a structural inconsistency between the income aspirations rooted in society and the productive capacity of the economy. We give this inconsistency a precise definition: as a gap between two equilibrium levels of the real exchange rate (RER). The macroeconomic equilibrium RER is the one that allows the economy to simultaneously attain full employment and balance of payments sustainability. The social equilibrium RER occurs when fully employed workers obtain the real wage that they bargain/claim. These two levels of RER may not coincide. There is a structural distributive conflict when the macroeconomic equilibrium RER is significantly higher than social equilibrium RER. We build a model to provide a stylized characterization of Argentina's economy and precise definitions of the two levels of RER. We then use the model to characterize macroeconomic policy and performance during the 1930-2015 period.

Argentina's economic performance, since the beginning of the new millennium, has been an object of analysis and intense debate. This is not surprising. The period began with a severe financial and debt crisis. In December 2001, the government announced the largest default on public debt in global financial history. The economy had also sunk into a deep depression: GDP contracted by more than 20% compared to its previous peak in mid-1998, unemployment reached almost 22% of the labor force and half of the population became poor. Rather unexpectedly for most observers, the economy began a rapid and strong recovery in mid-2002, which then turned into rapid and strong economic growth. During this process, employment grew very fast, many tradable services, manufacturing and agricultural activities boomed and non-traditional exports expanded at an unseeing pace. The impact of the global financial crisis of 2008–09 was short-lived and not as severe as in other emerging markets. However, by late 2011, despite the very favorable external context of low interest rates and high terms of trade, the economy started to be constrained by the lack of foreign exchange. In early 2014, it finally faced a balance of payments crisis. As a result, inflation accelerated and output and employment contracted. The full resolution and consequences of this crisis are — at the time we write these lines — still to be seen.

In recent years several authors have argued that developing countries should aim to target a stable and competitive real exchange rate (SCRER) to foster economic growth. A growing body of empirical research gives support to this claim. Although more theoretical work is needed, some ideas from development theory can help to explain the empirical findings. For instance, if modern tradable activities display some form of increasing returns to scale, market forces alone would deliver a set of relative prices that would make capital accumulation in these activities suboptimal. This paper supports the view that developing countries could target SCRER as a part of a development strategy that promotes the expansion of modern tradable activities. We review the empirical findings, discuss the channels through which a SCRER can stimulate economic growth, and describe the policies needed to pursue a strategy based on a SCRER.

A recent body of empirical research has documented a strong association between the level and volatility of the RER and economic growth. This research has relied on a variety of econometric techniques applied to large cross-country data sets. Although the documented positive effects of both RER competitiveness and stability on growth appear to be robust, it is still unclear what the mechanisms driving these associations are. Several explanations have been proposed, but their theoretical examination and empirical validation is still in an infant stage. I analyze the mechanisms that have been proposed and evaluate them in light of the documented empirical evidence. My reading is that two of them adjust to the empirical findings best: the financial globalization channel and the tradable-led growth channel. I conclude that since these mechanisms are not mutually exclusive, both might have some explanatory power.

Fil: Rapetti, Martin. CEDES. Centro de Estudio de Estado y Sociedad, Area de Economia. Consejo Nacional de Investigaciones Cientificas y Tecnicas (CONICET); Argentina