ECON-2220 Lecture Notes - Lecture 10: Capital Good, Foreign Exchange Controls, Comparative Advantage
28 Sep 2017
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Document Summary
Isi consists of establishing domestic production facilities to manufacture goods which were formerly imported. It was thought that isi would introduce a dynamic element into the latin american economies and increase their rates of growth. Although its proportion of total savings was often substantially below. 10 per cent, it was instrumental in setting up key manufacturing industries by transferring know-how and organizational capabilities. This was also true in infrastructure investments and heavy industries owned by governments, which depended on foreign financing and technical aid. Industry already represented a significant proportion of gdp in the earlier decades of the century. However, these industries consisted to a large extent of small workshops. In 1950 still over half of the work force in manufacturing was engaged in artisan type of activities: by the 60s, industry had become the dominant sector in argentina, brazil, mexico, chile.
