Neo-structuralist modeling and critique of orthodox stabilization policies in the Third World: a four imbalance model applied to Brazil.

Summary Inspired by the analysis of the instability of the Brazilian economy in the 1980s, this research is a contribution to the neo-structuralist macroeconomic approach. The first chapters are devoted to the debates generated by the adoption of liberal stabilization and adjustment policies. The study then presents a "four disequilibrium" macroeconomic model (real, monetary, external, and fiscal), inspired in particular by the work of l. Taylor, and e. Bacha. This model serves as a basis for a theoretical analysis of the perverse effects of traditional adjustment policies in economies subject to the double constraint of internal and external public debt. The properties of the model and the conclusions of the comparative static study are based in particular on the hypothesis of inflation induced by distributional conflicts, and on the fact that the government must cover the interest payments on the external debt by acquiring foreign currency from private exporters and make up the resulting public deficit by issuing currency or domestic currency. This theoretical approach is then confronted with the recent cyclical history of the Brazilian economy, with particular attention to the years 88-89.