Effective Demand, Economic Growth and External Constraints

Effective Demand, Economic Growth and External Constraints

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How to achieve a sustained economic development process in developing countries is up today an open issue. Traditionally it has been believed that liberalisation and free trade policies would have helped them develop. Yet the economic strategies based on the neoliberal reforms have proved to be wrong, especially for Latin America. The failures have been so strong that Latin America was led to more economic vulnerability and even to de-industrialisation. This book attempts to provide a better development strategy for Latin America, alternative to traditional outward-looking, free trade policies. After reviewing some traditional and heterodox theories, the book suggests that a demand-led growth strategy is a promising way to boost development. By extending this model to open economies this work stresses the external constraints that these economies have to face. Finally, a regional integration set-up is presented as a good complement to the demand-led growth strategy to reduce the...

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