From "Financieristic" to Real Macroeconomics

Abstract

The successful control of inflation and the reduction of budget deficits has been a widespread trend in Latin American countries in the last two decades. However, the economic and social performance of many of these economies has been disappointing in the same period. One of the main causes of this has been the lack of a comprehensive macroeconomic approach, which goes beyond the control of inflation and the budget deficit, and which also focuses explicitly on the real economy. Real macroeconomic balances, which basically involve making potential production or productive frontier compatible with effective demand, and maintaining exchange rates at levels consistent with a sustainable balance of external accounts, are crucial to achieve a more dynamic development with social equity.

JEL classification: O10 ; E61 ; E22 ; F32 ; G01