Discussion paper for DOC Policy Institute. Published in Portuguese in Folha de S.Paulo, 17.12.2017.
A short (4.000 words) summary of new developmentalism – a new theoretical framework for allow middle-income countries to grow again. The theory is focused in the exchange rate and in the current account, and argues that these countries must keep its macroeonomic prices right to grow. Yet, there is a tendency to to the chronic and cyclical overvaluation of the exchange rate, which makes the competent manufacturing companies, existing and potencial, non-competitive. To neutralize such tendency, which is consequence of a high level interest rate and a non-neutralized Dutch disease, the country must have fiscal and exchange rate responsibility; it mut keep the interest rate low and the exchange rate competitive.