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O grupo de pesquisa Macroeconomia Estruturalista do Desenvolvimento, o maior grupo de pesquisa heterodoxo do Brasil (www.sdmrg.com.br), sediado no Departamento de Economia da Universidade de Brasília, irá organizar duas sessões especiais na Sétima Conferência Internacional da Astril (Associazone Studi e Richerche Interdisiciplinare Sul Lavoro) a ser realizado no Departamento de Economia da Universitá degli Studi Roma Tre, na cidade de Roma, Itália, no período de 25 a 26 de janeiro de 2024.

Vejam abaixo as sessões e os papers que serão apresentados, dois deles de autoria de alunos do curso de graduação em economia da UnB e um de autoria de um aluno do programa de doutorado em economia da UnB.

Structural Change and the Political Economy of Climate Change Session Proposal

Topic 3: Structural change, employment displacement, and social benefits

The Structural Development Macroeconomics Research Group (SDMRG) was founded back in 2008, in the aftermath of the “Great financial crisis”, and currently has more than thirty members from academic to policy circles in South America, Europe, and the United States (http://www.sdmrg.com.br/home). For the upcoming 7th ASTRIL conference, we would like to propose 2 hybrid sessions of 4-5 papers each:

SESSION 1

  1. What drives oil dependence in the EU? An empirical assessment of technology-push and demand-pull factors (Federica Cappelli, University of Ferrara, In person)

European Union (EU) continues to depend heavily on fossil fuels since oil constitutes more than one-third of total energy available. We aim to understand what factors foster or reduce oil dependence in European countries, focusing on the role of environmental policies and eco-innovations. We exploit network analysis to represent the international oil trade network, allowing us to uncover different aspects of oil dependency. This information is then used within a proper econometric framework, which covers the period from 1999 to 2019 and accounts for the presence of cross-sectional dependence. Results indicate that both demand-pull and technology-push factors play a role in alleviating European countries’ dependency on oil, but, at the same time, the relative importance depends on how we define the concept of oil dependency.

  • Endogenous political cleavages and the social dimension of climate change (Marwil J. Davila-Fernandez, University of Siena, In person)

The ongoing transformation of the social base supporting political choices is happening in the context of raising demand for greater efforts to reduce carbon emissions. Our research question lies in the intersection between these two major themes. We develop a heterogeneous agent’s model that differentiates between left- and right-wing voting preferences in two main political dimensions: Economic-Distributive and Socio-Cultural. A continuous-time version of the discrete- choice approach describes the composition of the population over time. The model is compatible with the emergence of

“left-left”, “left-right”, “right-left”, and “right-right” coalitions, each associated with a carbon tax choice and whether to tax the skill premium. Through induced technical change, taxing emissions influences the development of carbon- neutral production techniques, impacting output and ultimately feeding political attitudes. Human capital accumulation results in a wage differential that influences production and feedback on inequality. We numerically study the implications of secularisation and the asymmetric effects of carbon taxes on low/high-skilled workers to green transition. It is shown that achieving absolute decoupling is a two-part problem. Reaching a consensus for implementing a carbon tax is only the first step. A sufficiently strong element of induced technical change favouring carbon-neutral production techniques is also necessary to avoid reducing living standards.

  • Policy coordination for ecological structural change: A macroeconomic model (Chiara Grazini, University of Tuscia, In person)

Ecological transition is based on ecological structural change that requires innovative macroeconomic policies, and this article proposes macroeconomic modelling to provide a baseline analytical framework to tackle this issue. Ecological policy coordination entails integrating the traditional tools of monetary and fiscal policies with typical industrial policies. Specifically, the macroeconomic modelling introduces an eco-Keynesian cross and an eco-3 equation model: ecological degrowth is the most straightforward approach to attaining environmental sustainability. The eco-3 equation model shows ecological macroeconomic policies’ positive role in fostering win-win environmental and social sustainability strategies and mitigating energy inflation by stimulating an ecological structural change. In the current geopolitical context of rising energy prices, mainstream monetary policy alone can merely reinstate the economy to its initial equilibrium and, in some instances, exacerbate the situation due to financial speculation. The imperative for policy coordination becomes even more pronounced. The coordination between less austere monetary stimulating green finance and ecological industrial and fiscal policies could not only overcome the inflationary shock but enable the economy to achieve the goal of sustainable and inclusive development.

  • The impact of trade liberalization and exchange rate undervaluation on exports, imports and balance of Latin American countries: An essay in honor of A. P. Thirlwall (Marcos Campo, University of Brasilia, Virtual)

This work aims to analyse the impact of trade liberalisations in the 80s and 90s on developing countries’ exports, imports, and trade balances. It expands and updates the study conducted by A. Santos-Paulino and A. P. Thirlwall in 2004 on the same topic but focuses on the case of Latin America. The mainstream premise that trade integration between countries always promotes development is disputed by some structuralist economic theories, especially in the context of developing nations. Critics argue that while implementing trade liberalisation reforms can improve a nation’s reach in international commerce, it also has a greater potential for foreign goods to infiltrate the national market. This can create an imbalance in the balance of payments and potentially lead to a foreign currency crisis, an issue historically associated with Latin American economies. We test this hypothesis using data from seven Latin American countries between 1970 and 2019 to estimate econometric models for exports, imports, and trade balance. Following the 2004 seminal paper, the econometric models include a dummy variable for liberalisation, which becomes positive in the year when liberalisation occurred, and the following years, to measure the impact of these reforms on the stated variables. A variable for the exchange rate undervaluation capturing the effect of the level of exchange rate value instead of the rate of change of exchange rate was also included in the analysis. Although the inherent uniqueness of each Latin American economy makes generalising the results difficult, the findings of the estimations support the idea that this type of trade liberalisation can produce currency imbalances that may lead to crises, as witnessed in the region in past decades.

SESSION 2

  1. Political conflict, green capabilities and growth patterns in a Kaleckian small open economy (Julia Juarez, National Autonomous University of Mexico, In person)

The paper presents a Kaleckian model that discusses the condition for sustainable development, defined as a sustainable growth path in three dimensions: economic, social, and environmental. There are three actors in the model: green capitalists (G), brown capitalists (B) and workers (reds, R), whose different alliances define the level of three key parameters in the model: taxes, social expenditure and public investment in green capabilities, all defined as shares in GDP. Three political coalitions are formed: green-red, green-brown and red-brown. It is shown that the GR coalition can produce sustainable and inclusive growth. However, acute trade unbalances compromise growth in the medium term. The magnitude of the disequilibrium will depend very much on the capacity of public investment to boost non-price competitiveness based on green capabilities. The GB alliance, in turn, produces sustainable but not inclusive growth. In this case, the external imbalance will be less acute than with the GR coalition, but the budget deficit will remain high and unsustainable in the long run. Finally, the RB coalition will generate a path that is unsustainable from the point of view of the environment. In contrast, it may produce stable growth with some income redistribution in periods of high demand for commodity exports. We apply the model to the Latin American case and identify different patterns in the region in terms of the key parameters of the model.

  • Socio-environmental conflicts as a source of change in mining activities: the case of Chile (Gabriel Palazzo, Institute of Development Studies, In person)

Responding to climate change requires transitioning at pace and scale to low-carbon energy sources. Leading world economies are committing to the transition. However, the transition to a new energy system will require a considerable supply of minerals, whose extraction is associated with multiple environmental and social problems. In Chile, one of the main critical mineral suppliers of the world, 50% of all medium and large-scale mining is disputed by civil society. Our paper shows that those conflicts block mineral extraction in Chile and force mining companies and the government to negotiate with local communities. We compiled an unprecedented dataset that geo-localises and connects socio- environmental conflicts and show evidence of their impacts. In addition, we document how the regulation of mining activities has been forced to change because of the evolution of socio-environmental conflicts and the conquest of rights by indigenous people.

  • Bibliometric perspectives on the development in the Latin America and the Caribbean (Maria L. Almeida- Luz, University of Brasília, Virtual)

The evolution of development studies in Latin America and the Caribbean can be traced through various topics, interdisciplinary approaches, and methodological pluralism. This study applies bibliometric analysis to explore research patterns systematically and quantitatively in the academic literature. The analysis employs co-citation, bibliographic coupling, and co-occurrence networks to identify patterns, thematic clusters, and influential contributions within the scholarly discourse. The objective is to uncover historical and contemporary complexities, providing insights into potential directions for future research and policy considerations. Temporal dynamics underscore the importance of

historical context, while a consistent regional focus reflects a commitment to understanding the unique challenges Latin American and Caribbean countries face. Emerging themes, including extractive, renewable energy, and globalization, indicate responsiveness to contemporary realities. The study observes the region’s dynamic evolution of development studies, reflecting changes in its socio-political and economic landscape. Scholars have shifted focus from early examinations of historical legacies and colonization to contemporary explorations of democracy, social inequality, and globalization’s impact. This evolution emphasizes the need for a comprehensive understanding incorporating diverse perspectives, methodologies, and historical contexts. The synthesized overview of the development discourse in the region can guide future research and inform decision-making, contributing not only to academic scholarship but also offering practical implications for policymakers addressing the multifaceted challenges, opportunities, and progress in Latin America and the Caribbean.

  • A green new developmentalism strategy for a forest transition (Daniel M. Teixeira, University of Brasilia, Virtual)

The relationship between economic scale and its impacts on the environment is neither linear nor stable across economies and over time since it depends on the technologies adopted in a given production structure. In this context, the land-use change process in a country or region of sustained forest recovery after a long decline in forest cover in the early stages of economic development is called forest transition. Specifically concerning the forest sector, public policies should unlock investments in sustainable forest management to increase its contribution to the supply of food, fibres, and forest raw materials with the potential to replace fossil resources, as well as to capture and store carbon and provide other significant environmental services. This study aims to discuss the relationship between ecological structural change, forest transition, and the implications for a green new developmentalism strategy. This discussion takes place in the Brazilian context, where various policy instruments exist to combine forest protection and sustainable use while simultaneously achieving carbon emission reduction goals. Furthermore, forest policy management is decentralized among federal, state, and municipal governments, affirming the literature’s recommendation that the state’s role in a national eco-developmental strategy involves policy coordination, providing information during policy management, harmonizing policy instruments, and supporting all actors in identifying opportunities for economic diversification that contribute to environmental sustainability. Consequently, it is suggested that the national eco-developmental strategy must have a high priority on the governmental agenda.

  • Reindustrializing Brazil: a comprehensive analysis of industrial trajectory, policies and a forward- looking agenda (Luiza N. de Sousa, University of Brasilia, Virtual)

This study presents a thorough exploration of the trajectory of Brazil’s industrial sector, focusing on the nuanced process of deindustrialization and delving into the historical evolution of industrial policies, with particular attention to recent initiatives dating back to Lula’s first government and their outcomes. Embracing a heterodox viewpoint rooted in sector- specific economic growth and Kaldorian principles, the paper underscores the pivotal role of the industrial sector as a driver of overall economic prosperity. The paper advocates for a strategic industrial policy agenda to navigate Brazil towards reindustrialization, fostering sustained, long-term economic growth. By dissecting the industrial sector’s trajectory and examining Brazil’s prevailing industrial policy agenda, alongside insights from some developed nations actively pursuing reindustrialization, this study goes beyond analysis to propose a forward-looking industrial policy plan. Tailored to address Brazil’s unique challenges and opportunities, this study serves as a roadmap for policymakers, offering actionable recommendations to revitalize the industrial landscape.