30 Questions
What were the key differences between Latin American and Asian borrowers in terms of foreign borrowing usage?
Latin American countries did not use foreign borrowing to develop a resource base in tradable goods, especially export industries.
How did the debt-export ratios and debt service to export ratios diverge between Latin America and Asia?
Debt-export ratios and debt service to export ratios diverged markedly due to faster export growth in Asia.
What role did overvalued exchange rates play in foreign borrowing and capital flight in Latin America?
Overvalued exchange rates in Latin America encouraged capital flight.
How did the share of exports in GDP change between Asia and Latin America from 1965 to 1980?
By 1980, the export-GDP ratios in Asia were far higher than those in Latin America.
What were the main uses of foreign borrowing by Latin American governments such as Argentina, Mexico, and Venezuela?
Foreign borrowing often went to finance the private sector's accumulation of foreign assets.
Why is it crucial to understand the political economy of export promotion in Latin America?
Understanding the political economy of export promotion is essential to comprehend the continuing paralysis of Latin American economies.
What is the formula used to measure the annual percentage change in dollar tradable goods prices?
0.5 (px + pm)
How is the real interest rate calculated in relation to the dollar tradable goods prices?
i - p'
Which countries experienced a fall in real interest rates between 1979-83 relative to 1976-78?
Some oil-exporting countries
Why did Brazil and Korea show very large increases in real interest rates?
Due to large increases in nominal interest rates combined with falling export prices
What factor is used to measure the interest rate shock as a proportion of GDP?
Debt-GDP ratio
What would an ideal measure of interest rate changes require?
A comprehensive accounting of the country's foreign assets and debts
What challenges are faced in obtaining accurate measures of the size of tradable sectors over time?
Trade data only show actual trade extent, not value of production; lack of sector-level data hinders evaluation of returns on investments.
How is the growth of the tradables sector typically estimated?
By measuring the extent of actual exports relative to total income.
What trend is observed in the growth of exports relative to GDP in East Asia since 1965?
Rapid growth compared to a fairly flat pattern in Latin America.
What is the three-sector framework used to analyze the allocation of resources in the economy?
Importables, exportables, and nontradables
How did the export GDP share of Korea and Indonesia change from 1965 to 1983?
Korea went from 9% to a higher share, while Indonesia went from 5% to a higher share.
What is another way to gauge the extent of the tradables sector based on production and employment data?
By dividing production and employment into agriculture, industry, and services.
How does the standard two-sector model differ from the three-sector framework in analyzing trade policies?
The two-sector model oversimplifies by only focusing on exportable and importable sectors, while the three-sector framework considers nontradables as well.
Why is it important to consider the growth of the service sector in Latin America and East Asia?
To understand the differences in the size of the nontraded goods sector and the impact of trade policies on resource allocation.
How is the tradables sector often loosely equated with nontradables sector?
By associating tradables with agriculture and industry, and nontradables with services.
How do protectionist policies in Latin America impact the export sector according to the three-sector framework?
Protectionist policies can harm nontradables and benefit both the importable and exportable sectors.
Explain the potential consequences of protectionism in the context of the three-sector framework.
Protectionist policies can simultaneously support export-promotion while harming sectors like nontradables.
How does the allocation of resources between tradables and nontradables depend on various economic factors?
Trade policies, exchange rate management, and aggregate demand management influence the allocation of resources.
What factor helped to tip the balance towards export-promoting strategy in the 1960s in East Asian countries?
Rural strength
Which country had powerful agricultural interests, particularly in coffee, that were a substantial political force behind its liberalization in the mid-1960s?
Colombia
Apart from economic interests, what other elements played a significant role in defining trade and exchange rate policies in Latin America and Asia?
Intellectual and ideological elements
What contributed to the strength of protectionist sentiment throughout Latin America?
Dependency theory and opposition to U.S. involvement in local economies
What hypothesis influenced Latin American governments to formulate import-substitution policies?
The Prebisch hypothesis
Which region has a largely rural population compared to an overwhelmingly urban population in Latin America?
Asia
This quiz covers the challenges in measuring the size of tradable sectors over time, the limitations of trade data, and the significance of sector-level data in evaluating investments. Explore the complexities of determining the value of production in internationally traded commodities.
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