Abstract

SALAMA, Pierre. The two “original sins” of the progressive governments of Argentina and Brazil. Rev.econ.inst. [online]. 2019, vol.21, n.40, pp.207-232. ISSN 0124-5996.  https://doi.org/10.18601/01245996.v21n40.08.

During the presidencies of Néstor Kirchner (2003-2007) and Cristina Kirchner (2007-2015) in Argentina, and of Lula (2003-2011) and Dilma Roussef (2011-2016) in Brazil, both countries showed relatively high growth rates, real wages increased and poverty decreased. In Argentina, the economic dynamics slowed down in 2012 and Brazil entered into a deep crisis in 2014. These failures can be explained by two "original sins": the relaxation of external constraint in Argentina and Brazil and financialization in Brazil. The former generated a real appreciation of the national currency against the dollar not compensated by an increase in labor productivity. The second manifested itself to the detriment of industrial investment. Although these effects could have been controlled, their cost has been very high.

JEL: F1, F43, N16, O23.

Keywords : Economic growth; external constraint; devaluation; financialization.

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