Part III.

Macroeconomics and Small Developing Economies: A Policy-Maker’s Perspective. (Section 5, External Debt ) PP. 111-112 By DeLisle Worrell.

In Economics in a Changing World. Edited by Edmar L. Bacha

Issues of major concern in the macroeconomic literature on external debt are the optimal level of debt and the risk of debt repudiation. The optimum rate of debt accumulation is determined by the growth rate and the real interest rate. The faster the growth rate of a competitive economy the greater is its capacity to service external debt. The more rapidly an economy grows the more external debt it may support, for any level of the interest rate.

In the open economy the real interest rate is exogenous, determined on the international capital market. The rate of debt accumulation therefore depends on the growth rate. If the growth rate is exogenous, as it is in many models of debt accumulation, there is a maximum sustainable rate of debt accumulation. Models where growth depends on savings encourage the notion of an external debt constraint on growth, because an increase in interest rates reduces the optimal rate of external debt accumulation and therefore the resources available for growth. However, this implies that the increase in domestic finance in response to the increase in real interest rates is not sufficient to compensate for the reduction in external borrowing.

In models of endogenous growth it becomes clear that external debt accumulation is not the constraint, though real interest rates may be. The rate of growth depends on investment-promoting policies such as macroeconomic stability, trade policy, tax policy and the provision of public goods. For any rate of growth the real interest rate determines the ratio of external to domestic finance. If there is an external constraint on growth it is the real interest rate, which may reduce the level of investment, ceteris paribus.

One may assess the risk of default on external debt by comparing the cost of economic adjustment to provide surpluses for debt servicing with the costs of debt repudiation (Ghatak and Levine, 1991). These models are helpful in understanding the evolution and treatment of debt in the recent past, but they are less useful in determining future strategy because the results depend critically on parameters such as the rate of time preference of borrowers and the degree of risk aversion of lenders, which can only be guessed at.

The author states that:

Item 1 -

Part III.

Macroeconomics and Small Developing Economies: A Policy-Maker’s Perspective. (Section 5, External Debt ) PP. 111-112 By DeLisle Worrell.

In Economics in a Changing World. Edited by Edmar L. Bacha

Issues of major concern in the macroeconomic literature on external debt are the optimal level of debt and the risk of debt repudiation. The optimum rate of debt accumulation is determined by the growth rate and the real interest rate. The faster the growth rate of a competitive economy the greater is its capacity to service external debt. The more rapidly an economy grows the more external debt it may support, for any level of the interest rate.

In the open economy the real interest rate is exogenous, determined on the international capital market. The rate of debt accumulation therefore depends on the growth rate. If the growth rate is exogenous, as it is in many models of debt accumulation, there is a maximum sustainable rate of debt accumulation. Models where growth depends on savings encourage the notion of an external debt constraint on growth, because an increase in interest rates reduces the optimal rate of external debt accumulation and therefore the resources available for growth. However, this implies that the increase in domestic finance in response to the increase in real interest rates is not sufficient to compensate for the reduction in external borrowing.

In models of endogenous growth it becomes clear that external debt accumulation is not the constraint, though real interest rates may be. The rate of growth depends on investment-promoting policies such as macroeconomic stability, trade policy, tax policy and the provision of public goods. For any rate of growth the real interest rate determines the ratio of external to domestic finance. If there is an external constraint on growth it is the real interest rate, which may reduce the level of investment, ceteris paribus.

One may assess the risk of default on external debt by comparing the cost of economic adjustment to provide surpluses for debt servicing with the costs of debt repudiation (Ghatak and Levine, 1991). These models are helpful in understanding the evolution and treatment of debt in the recent past, but they are less useful in determining future strategy because the results depend critically on parameters such as the rate of time preference of borrowers and the degree of risk aversion of lenders, which can only be guessed at.

The author argues that one may assess the risk of default on external debt by:

Item 2 - comparing the cost repudiation with the political consequences of default.

Considere os seguintes estados econômicos:

Suponha que os individuos A e B tenham função de utilidade U_i=X_iY_i; i=A,B. Então:

Item 1 - O Estado 2 é Kaldor superior ao Estado 0.

Uma empresa pode obter eletricidade com dois geradores. O mais moderno, o gerador 1, tem custo marginal Cmg₁= 10 + 2Q1 e o mais velho, o gerador 2, tem custo marginal Cmg₂ = 20 + 2Q₂ (onde Q1 e Q2 representam a produção obtida a partir de cada gerador). A empresa, obviamente, quer produzir ao custo mínimo. Assim sendo:

Item 1 - ela não deve utilizar o gerador mais velho quando a produção é maior do que 5 Kwh.

Com base na Teoria da Estimação, temos:

Item 1 - Com base numa amostra aleatória de duas observações (X₁ e X₂) de uma distribuição populacional com média !$ \mu !$, se !$ W=1/3\cdot X_1+2/3\cdot X_2 !$, então W é um estimador tendencioso de !$ \mu !$.

Considerando as várias teorias explicativas dos ciclos econômicos, indique se as proposições abaixo é falsa ou verdadeira:

Item 2 - Rigidez nominal de preços e imperfeições informacionais provocam os ciclos para os novos keynesianos.

O item abaixo se refere a seqüências e séries de números reais. Julgue a afirmação:

Item 0 - Seja !$ \sum^\infty_{n=1}a_n !$ uma série convergente. Então !$ lim_{n\rightarrow \infty}a_n=0 !$.

Part II

Recruitment of Labour for the Mills in The Early Factory Masters - Transition of the Factory in the Midlands Textile Industry. By Stanley Chapman. Chapter 9 - pp 156-157.

One of the most difficult problems which entrepreneurs in the early cotton and worsted-spinning industry had to face was the recruitment and retention of a labour force. The problem was, in part, a consequence of the well-known reluctance of the working-classes to enter the factories, and certainly the domestic framework knitters and weavers of the region were not easily persuaded to exchange their freedom for factory discipline. The scarcity of labour was also a reflection of the general shortage in the manufacturing districts. The hosiery and lace industries were growing very rapidly, and their expansion coincided with that of the spinning industry. Wages appear to have been higher in hosiery and lace than for similar grades of workers (skilled, semi-skilled and unskilled) in the mills. In the rural areas, there was a steady drain of good workers to the towns and large manufacturing villages, where the best-paid work was to be found. The French war also aggravated the labour shortage after 1792 by drawing large numbers of men into the army.

It has already been noted that the wages paid in the spinning-mills were not sufficiently high to attract workers from regular employment in the towns. Farey points out that Derbyshire millworkers earned higher wages than farm labourers in the country and White records that, in Bakewell, 'wages were raised immediately' after Arkwright's mill began production there. Fitton and Wadsworth suggest that Arkwright and Strutt did not employ parish apprentices, and that their labour force was probably recruited in the villages within a four- or five-mile radius of the factories. This explanation is not very convincing since other evidence, overlooked by these two authors, shows that even juvenile and female labour had to be brought into Derbyshire from the main centres of the cotton industry at Manchester and Nottingham.

The author states that:

Item 3 - The French war drafted large numbers of men into the army.

O preço do café no comércio internacional caiu drasticamente à época da Grande Depressão, o que levou o Governo brasileiro a implementar uma política de defesa do setor cafeeiro. Em relação a esses fatos, pode-se afirmar que:

Item 0 - a proteção ao setor era desnecessária, já que a queda no valor externo da moeda brasileira no período foi proporcionalmente maior do que a redução do preço do café;

Classifique como verdadeira ou falsa a afirmação a seguir :

Item 0 - Se !$ f(0)=5\, e\, f(x)=\int 3x^{\dfrac{1}{2}}dx !$, então !$ f(4)=21 !$.

Uma empresa pode obter eletricidade com dois geradores. O mais moderno, o gerador 1, tem custo marginal Cmg₁= 10 + 2Q1 e o mais velho, o gerador 2, tem custo marginal Cmg₂ = 20 + 2Q₂ (onde Q1 e Q2 representam a produção obtida a partir de cada gerador). A empresa, obviamente, quer produzir ao custo mínimo. Assim sendo:

Item 0 - ela não deve usar o gerador mais velho para produzir menos do que 5 Kwh.