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The Expansion in Latin America - 19th Century

Autor:   •  April 4, 2011  •  Essay  •  1,565 Words (7 Pages)  •  727 Views

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The expansion in Latin America during the nineteenth century poses many views and perspectives that all have support from different resources. The exogenous perspective focuses mainly on international demand, devaluation of money and geographical location where as the endogenous perspective focuses mainly on the development of transportation, expansions and need for food, and monopoly of coffee. The exogenous and endogenous perspective share both similarities and differences in their points of view concerning the expansion of the export led growth model such as the importance of trade within a country and internationally. The endogenous perspective, however, has more factors that contribute to the expansion of the export-led growth model throughout the countries that make up Latin America.

The endogenous perspective on the export led growth model during the nineteenth century in Latin America has many different views on how the domestic development in certain countries in fact helped their economic growth. There was impressive growth in some Latin America countries before the First World War. Chile, Mexico, Argentina and Brazil began to exploit their untapped natural resources, which those countries had in abundance, had produced a sudden and impressive increase in their wealth. Mexico, Brazil and Argentina built their railway systems that would end their economic isolation. A bust unfortunately followed this boom. The expansion was halted which led to people wondering what happened with the income that was generated during the boom. The end of World War One created additional demand that led to the exceptional increase in supply. Policies were recommended to lead to the promotion, through strong protectionist measures, of a process of industrialization oriented to the internal market.

These economies had a distinct feature from the demand side which was the lack of domestic markets for the production of goods based on natural resources. The extreme case was that of an enclave, in which there was no increase in domestic demand, nor an increase in saving that could contribute to capital accumulation. Other explanations focused on the distortions that led to monoculture. It was difficult to support these ideas and policies but after turning to the German historical school had also been influential in some South American countries.

The traditional explanation of the process of export-led growth in Argentina from 1880 to 1930 is found in a classic book by Aldo Ferrer. According to Ferrer, Argentina was able to reach a new stage of growth due to the integration of the world economy and the expansion of the frontier in the pampean region. Europe's industrial expansion required new markets overseas to produce an international division of labour. The level of income and investments was affected but dependent on the business cycle of the central countries. Argentina's economic growth was determined

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