Showing posts from July, 2017

Beggar thy Neighbor economic development at the Rick Smith Show

On Rick's show last Friday. Some context here.

On Ecuador

The original letter I co-signed is here, and the debate that followed was posted by Bill Black here.

The new Marriner S. Eccles Institute, and his legacy

There are many issues I take exception with the piece at the Deseret News on the new Marriner S. Eccles Marriner S. Eccles Institute for Economics and Quantitative Analysis at the University of Utah’s David Eccles School of Business. In the first place, the notion that it, somehow, “will provide some philosophical balance to the university’s educational offerings and scholarship on economics.” Not just because there is no need for more balance. Everybody in the David Eccles School is mainstream, neoclassical (so no balance there), and a good chunk of the Econ Dept (yep, basically there are two Econ. Depts at the U, which shouldn’t surprise anybody; NYU has a very neoclassical and conservative one with Thomas Sargent in the Liberal Arts/Social Sciences division, and another with Dr. Doom, Nouriel Roubini, at the Stern School of Business) also is neoclassical. The department was always pluralistic.

Actually, the balance in the education is brought by the fact that there are still a few…

Heterodox Currents in Latin America

Esteban Pérez Caldentey will be talking about the topic in the next conference of the central bank of Bolivia. Program, that includes also Luis Bértola speaking on heterodox (presumably the unconventional, but not heterodox as in not mainstream inspired) monetary policy, is available here.

Beyond the traditional monetary circuit

Slow posting will continue the rest of the Summer. Here a paper by Sergio Cesaratto that might be of interest. From the abstract:
The paper is a contribution to a long-run theory of effective demand with elements from monetary circuit theory, Modern Monetary Theory and endogenous finance analysis. Some shortcomings of the still influential neo-Kaleckian growth model and monetary circuit theory are underlined, and the Sraffian supermultiplier is indicated as the most promising heterodox approach to growth and instability in capitalism. The Sraffian supermultiplier allows full consideration of the autonomous components of aggregate demand as the ultimate sources of growth and instability in modern capitalism. Following Steindl, capital gains are included among these components. Autonomous demand and investment are typically fed by endogenous finance. The paper articulates the relation between autonomous demand and investment on one hand, and endogenous finance on the other, in the ligh…

From Vulture Funds to 100-year bonds: Has Argentina Turned Around?

Just a couple of years ago Argentina’s left of center government was besieged by foreign investors, the hedge funds known as Vulture Funds, that demanded full payment for their bonds acquired at heavily discounted prices in the secondary markets. The New York courts ruled in favor of the Vulture Funds, and Argentina was unable to borrow in international markets, even though during the successive governments of the late Néstor Kirchner and her wife Cristina Fernández de Kirchner the country had successfully renegotiated its debts with 93 percent of the bondholders, and the economy had recovered from the worst crisis in its history, growing at fast pace while diminishing inequality.

In November 2015, the left of center candidate associated to the Kirchners lost a close election to the center-right, neoliberal ex-mayor of Buenos Aires. Mauricio Macri, the new president, the heir to a private fortune amassed mostly during the last and bloody dictatorship and the ex-president of Boca Junio…

A theory of economic policy

New paper by Thomas Palley tilted "A theory of economic policy lock-in and lock-out via hysteresis: rethinking economists’ approach to economic policy" has been published. From the abstract: This paper uses hysteresis to develop the concept of policy lock-in and lock-out. Policy changes may near-irrevocably change the economy’s structure, thereby changing the distribution of wealth, income and power. That may lock-in policy by changing the political equilibrium. Exit costs that block policy reversals also cause lock-in. Conventional thinking treats policy as a dial which is adjusted according to the economy’s state. Policy lock-in questions the dial formulation and raises new issues for optimal policy design. It also offers insights into economic and political crisis theory. Policy lock-in is illustrated with examples that include tax policy, government spending, the euro, globalization, and the neoliberal policy experiment. Read full paper here.