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.
[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.
