3. ALTERNATIVE MACROECONOMIC CLOSURES

Output or capacity utilization is the key macroeconomic adjustment variable in the model discussed so far, along the lines urged by Kalecki and the Keynes of the General Theory. Output adjustment is plausible in many instances, especially during the contractionary stabilization programs which developing countries often undergo. Nonetheless, alternative adjustment modes and other sectors and financial instruments should be considered, since they apply in a wide range of circumstances. We pursue both tracks in this chapter. The aim of the exercises is to show how the basic model framework can be extended to deal with institutional structures and policy issues that arise frequency in the Third World.

Regarding ...

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