Income distribution and the balance of payments: a formal reconstruction of some Argentinian structuralist contributions Part II: Financial dependency

In this two-part paper, we explore the interaction between income distribution and the balance of payments, by assessing the contributions of three Argentinian exponents of the Latin American Structuralist School: Adolfo Canitrot, Oscar Braun and Marcelo Diamand. With this aim, we introduce a two-sector model inspired by the classical tradition. While Part I discussed the role of 'technical dependency', Part II examines the implications of 'financial dependency'. That is, the influence exerted on the profit rate of peripheral economies by the international profit rate. The main conclusion is that this new phenomenon reinforces the negative consequences of technical dependency on the economy's capacity to grow, and further restricts workers' possibilities of bargaining for higher real wages.