The Economies of Argentina and Brazil
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The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.
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Chapter 10: Anatomy of Distributive Changes in Argentina

Walter Sosa-Escudero and Sergio Petralia

Extract

10. Anatomy of distributive changes in Argentina1 Walter Sosa-Escudero and Sergio Petralia 10.1 INTRODUCTION In most regions and episodes the shapes of income distributions change slowly, a fact that led Henry Aaron (1978) to state that following them is like ‘watching the grass grow’. Unlike monetary or financial indicators, poverty or inequality indexes are computed mostly on a yearly basis; moreover, comparative studies have trouble establishing the statistical and economic significance of changes in contiguous years (see Sosa-Escudero and Gasparini, 2001). In the last 30 years Latin American countries have undergone a period of drastic changes, including episodes of marked cyclical macroeconomic performance, as well as profound changes in their economic structures associated with the globalization/privatization policies of the early 1990s. In the case of Argentina, and in contrast to Aaron’s appreciations, the distribution of incomes changed rapidly and significantly during this period, to the point that the title of a song by the cult pop band The Move, ‘I Can Hear The Grass Grow’, seems to provide a more accurate description. Mean income, or a related measure of central tendency, like GDP per capita, sometimes adequately serves the purpose of tracing out movements in income distribution, and performs well during episodes where its shape changes slowly. This fact may help to justify the scarcity of distributional studies before the 1990s in Argentina. The macro-dominated 1980s appropriately focused on following GDP, since most changes in the distribution of incomes during that period were macro-driven location movements, with subtle changes in...

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