Ponencia: Cimole-Fleitas-Porcile
Mario Cimoli (CEPAL)
Sebastián Fleitas (UDELAR)
Gabriel Porcile (CEPAL)
We will argue that, as set forth by the structuralist tradition, there is a large and persistent productivity gap between the region and the developed countries in sectors which are more technology-intensive. As a result, international competitiveness in these sectors is strongly dependent on the real exchange rate (RER). In developing countries, and in Latin America in particular, a high RER is necessary to remain competitive in goods that are not intensive in labor or natural resources --- that is, generally speaking, in many if not most of the goods that are intensive in technology, human capital and learning. A low RER reduces the share of these goods in exports and production and this in turn hurts growth.
In this paper we present a simple model relating long run growth with the RER, productivity gap and structural change. We also provide empirical evidence using panel data procedures showing the links between structural change, the export structure, export diversification and the RER. We argue that the appreciation of the domestic currency due to a commodity boom or to cycles of international financial liquidity may compromise growth by reducing export diversification and a lower dynamism in international specialization.
