Template-type: ReDIF-Paper 1.0
Author-Name: Sartorello Spinola, Danilo
Author-Email: sartorello@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: The La Marca Model revisited: Structuralist Goodwin cycles with evolutionary 
	 supply side and balance of payments constraints
Abstract: This research investigates the causes of endogenous volatility in Latin 
	 America by expanding the La Marca (2010) model. The expansion consists 
	 in study: (I) Price-neutrality, (II) stability of the external sector, 
	 and (III) fixed income distribution. We also add (IV) an evolutionary 
	 supply-side in which productivity is at the centre of the economic 
	 dynamic through international technology transfer and the 
	 Kaldor-Verdoorn effect. The results show that (1) Latin American 
	 parameter values increase the endogenous oscillatory adjustment. (2) In 
	 all cases the model converges. (3) The price-neutrality assumption and 
	 external sector stability depend on specific parameter values to show 
	 either a cyclical or a monotonic convergence pattern. (4) Fixed income 
	 distribution lead to a monotonic trajectory, reducing oscillations. (5) 
	 The inclusion of the productivity dynamics generates new sources of 
	 volatility in the relationship between productivity, capacity 
	 utilization, and net external assets.
Classification-JEL: E32, F44, O11, O30
Keywords: Economic Cycles, Structuralism, Macroeconomic Dynamics.
Series: UNU-MERIT Working Papers
Creation-Date: 20200114
Number: 2020-002
File-URL: https://unu-merit.nl/publications/wppdf/2020/wp2020-002.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2020002