A post-Kaleckian model with productivity growth and real exchange rate applied to selected Latin American countries

This paper aims to discuss the theory of productivity growth and its empirical applications, taking into consideration the impact of real exchange rate devaluation on productivity. The main question is: does the real exchange rate have a positive or a negative impact on productivity growth? The first step in answering this question is to discuss productivity growth in the context of demand regimes. The second step consists of an empirical experiment that estimates the productivity growth equation for a sample of Latin American countries. The overall outcome is that the Smith-Kaldor-Verdoorn coefficient is significant for all the analyzed countries: Argentina, Brazil, Bolivia, Chile, Colombia, Mexico, and Uruguay. Regarding the real exchange rate and this variable squared, the parameters are negative for all the countries, indicating that real exchange rate devaluation does not increase productivity growth.