Structuralist economics is an approach to

economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

that emphasizes the importance of taking into account structural features (typically) when undertaking economic analysis. The approach originated with the work of the

Economic Commission for Latin America The United Nations Economic Commission for Latin America and the Caribbean, known as ECLAC, UNECLAC or in Spanish and Portuguese CEPAL, is a United Nations regional commission to encourage economic cooperation. ECLAC includes 46 member States (2 ...

(ECLA or CEPAL) and is primarily associated with its director

Raúl Prebisch Raúl Prebisch (April 17, 1901April 29, 1986) was an Argentine economist known for his contributions to structuralist economics such as the Prebisch–Singer hypothesis, which formed the basis of economic dependency theory. He became the executi ...

and Brazilian economist

Celso Furtado Celso Monteiro Furtado (July 26, 1920 – November 20, 2004) was a Brazilian economist and one of the most distinguished intellectuals of his country during the 20th century. His work focuses on development and underdevelopment and on the persist ...

. Prebisch began with arguments that economic inequality and distorted development was an inherent structural feature of the global system exchange. As such, early structuralist models emphasised both internal and external disequilibria arising from the productive structure and its interactions with the dependent relationship developing countries had with the developed world. Prebisch himself helped provide the rationale for the idea of

Import substitution industrialization Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production.''A Comprehensive Dictionary of Economics'' p.88, ed. Nelson Brian 2009. It is based on the premise that ...

, in the wake of the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

and

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

. The alleged declining

terms of trade The terms of trade (TOT) is the relative price of exports in terms of imports and is defined as the ratio of export prices to import prices. It can be interpreted as the amount of import goods an economy can purchase per unit of export goods. An i ...

of the developing countries, the Singer–Prebisch hypothesis, played a key role in this.

Details

Dutt and Ros argue that structuralist economists try to identify specific rigidities, lags as well as other characteristics of the structure of developing countries in order to assess the way economies adjust and their responsiveness to development policies. A normal assumption within this approach is that the price mechanism fails * as an equilibrating mechanism, * to deliver steady growth, * to produce a "desired"

income distribution In economics, income distribution covers how a country's total GDP is distributed amongst its population. Economic theory and economic policy have long seen income and its distribution as a central concern. Unequal distribution of income causes ec ...

. Nixson reports Bitar's argument that there had become a broad consensus on what amounted to the neostructuralist approach. This included the recognition of: * the importance of political and institutional factors in the analysis of economic problems. * of the need to raise the level of domestic saving in order to raise the rate of investment given that external sources of finance are likely to be hard to come by * inflation as a "social phenomenon" requiring for its elimination social, psychological and political-institutional changes, as well as orthodox monetary and fiscal policies. * the false nature of dilemmas between for example ISI and EOI — planning and the market — agriculture and industry. * the need to strengthen the productive and technological base. * the importance of trying to improve the terms on which countries are integrated into the global economy and to improve international competitiveness. * structural adjustment as only one component of structural change. More recent contributions to structuralist economics have highlighted the importance of institutions and distribution across both productive sectors and social groups. These institutions and sectors may be incorporated macroeconomic or multisectoral models. At the macroeconomic level modern structuralists would trace the origins of their approach to Kalecki's ''Problems of Financing Economic Development in a Mixed Economy''. FitzGerald’s version of this model of an industrializing economy has three commodity markets (food, manufactures and capital goods), foreign trade and income distribution which underpin the specification of a financial-sector with savings, investment, fiscal and monetary balances. For multisectoral models Social Accounting Matrices (SAMs) (an extension to input-output tables) are often used. Lance Taylor has provided both a technical introduction to a form of structuralist economics and critique of more mainstream approaches.Taylor, L (2004) Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Harvard University Press.

New structural economics

New structural economics is an economic development strategy developed by

World Bank Chief Economist The Chief Economist of the World Bank (full title: Senior Vice President for Development Economics and Chief Economist of the World Bank Group) is the senior economist at the World Bank Group, tasked with providing intellectual leadership and direct ...

Justin Yifu Lin Justin Yifu Lin (; born on October 15, 1952) is a Chinese economist and professor of economics at Peking University. He served as the Chief Economist and Senior Vice President of the World Bank from 2008 to 2012. He has been appointed as China S ...

. The strategy combines ideas from both

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

and structural economics.

Notes

{{Schools of economic thought Development economics Schools of economic thought

Details

New structural economics

See also

Notes