Latin America, the region that disaccumulates capital: an approach from ecological economics and physical accounting

Abstract

The objective of this work is to prove that Latin America does not accumulate capital, but rather, decumulates it, due to its specialization in primary exports. To achieve this objective, the Accumulation/decumulation index was constructed and applied to each country on the planet with available data. The index was developed following the postulates of ecological economics and physical accounting. The results showed that the only Latin American economy that accumulates capital in a significant way is Mexico, others, such as Brazil or Panama, accumulate capital very slightly, while most Latin American economies decumulate capital. In addition, the index showed that Latin America is the region with the deepest decumulation of capital, followed by Africa. This index shows facts that traditional methodologies do not show, as it is more appropriate to measure capital flows in primary-exporting countries such as those in our region, since it considers physical flows in addition to monetary ones.