exchange rate, income distribution and technical β¦Β Β· technological progress figure 1 β the...
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EXCHANGE RATE, INCOME DISTRIBUTION AND TECHNICAL CHANGE IN A BALANCE-OF-PAYMENTS
CONSTRAINED GROWTH MODEL
Rafael Saulo Marques Ribeiro Ph.D student at the University of Cambridge, UK
Gilberto Tadeu Lima Department of Economics, University of SΓ£o Paulo, Brazil
John S. L. McCombie Department of Land Economy, University of Cambridge, UK
UNU-MERIT conference 26-28 November 2014
The balance-of-payments constrained growth model revisited
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The balance-of-payments constrained growth model revisited
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The balance-of-payments constrained growth model revisited
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Endogenizing the income elasticities
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Endogenizing the income elasticities
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Technological progress
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Technological progress
FIGURE 1 β The locus π π = 0
ππ
πππΏ 0.5 πππΏβ
π0πΌ3
ππβ
πππΏ2
1
1
π π = 0
πππΏ1
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Functional income distribution
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Functional income distribution
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Functional income distribution
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Functional income distribution
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FIGURE 2 β The locus οΏ½ΜοΏ½ππΏπΏ = 0
ππ
πππΏ 0.5
πΎ0πΎ2
1
1
οΏ½ΜοΏ½ππΏ = 0
The technology gap and income distribution dynamics
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The technology gap and income distribution dynamics
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FIGURE 3 β The loci οΏ½ΜοΏ½π = 0 and οΏ½ΜοΏ½ππΏπΏ = 0
ππ
πππΏ 0.5
πππΈ1
1
1
οΏ½ΜοΏ½ππΏ = 0
πππΏπΈ1 πππΏπΈ2
οΏ½ΜοΏ½π = 0
πππΈ2
πΈ1
πΈ2
The technology gap and income distribution dynamics
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The technology gap and income distribution dynamics
FIGURE 4 β The low wage share region
ππ
πππΏ
πΈ1
ππ π = 0
ππποΏ½πΏπΏ = 0
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The technology gap and income distribution dynamics
FIGURE 5 β The high wage share region
ππ
πππΏ
πΈ2
ππ π = 0
ππποΏ½πΏπΏ = 0
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Real exchange rate, technological progress and income distribution
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FIGURE 6 β The permanent impact of a nominal devaluation on the RER
π‘
πΞΞ
π πΈπ
π πΈπ 0
π πΈπ πΈπΏ
π‘β 0
Real exchange rate, technological progress and income distribution
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FIGURE 7 β The impact of an undervaluation in locus οΏ½ΜοΏ½π = 0
ππ
πππΏ
1
1
οΏ½ΜοΏ½π0 = 0 οΏ½ΜοΏ½π1 = 0
0.5
Real exchange rate, technological progress and income distribution
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FIGURE 8 β The impact of an undervaluation on locus οΏ½ΜοΏ½ππΏπΏ = 0
ππ
πππΏ
1
1
οΏ½ΜοΏ½ππΏ1 = 0
0.5
οΏ½ΜοΏ½ππΏ0 = 0
Real exchange rate, technological progress and income distribution
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FIGURE 9 β The impact of a devaluation on the dynamics between ππ and πππΏπΏ
ππ
πππΏ πππΏπΈ2β²
πππΈ1
1
1
οΏ½ΜοΏ½ππΏ1 = 0
πππΏπΈ1 πππΏπΈ2
οΏ½ΜοΏ½π = 0
πππΈ2
πΈ1
πΈ2 πΈ1β²
πΈ2β² πππΈ2β²
πππΏπΈ1β²
πππΈ1β²
The net impact of a currency devaluation on long-term growth
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The net impact of a currency devaluation on long-term growth
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FIGURE 10 β The impact of a currency devaluation on long-term growth
ππ
πππΏ
Ξ
Ξ 450
πππΈ(Ξ)
πππΏπΈ(Ξ)
π¦π΅π0 π¦π΅π1 π¦π΅π2
πππΏπΈ2 πππΏπΈ2β²
πππΈ2β²
πππΈ2 πΈ2
πΈ2β²
ΞπΈ2β² ΞπΈ2