Abstract
This paper develops a model for the exchange rate in Brazil during the second half of the nineteenth century. The exchange rate discussion has a bearing in the sources of industrialization in Brazil. Two explanations stem from a primary export base. Whereas the ‘adverse shock argument’ links industrialization to unfavorable conditions in the external sector and exchange devaluations, the alternative approach views industrialization from the standpoint of the growth of income brought by the rise in exports. Those mechanisms are discussed. Also considered are the effects of monetary policy and the behavior of wages. The evidence shows that purchasing power parity is not enough to explain the exchange rate behavior, which clearly responded to coffee export revenues.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
