Wednesday, April 17, 2013

Keynes and Prebisch

The journal Estudios Críticos del Desarrollo has a new issue (in Spanish) on Raúl Prebisch. Below the abstract for the paper co-authored with Esteban Pérez Caldentey on Prebisch and Keynes.

Keynes had a profound influence on Prebisch, not only in terms of his diagnosis of the main failures of market economies, but also on the need to pursue pro–active and anti–cyclical policies. However, Prebisch was critical of Keynes’ most important publication, The General Theory of Employment, Interest and Money (1936). He viewed this work as being removed from the reality of capitalist economies. He also argued that it was inconsistent and did not represent at all a break with conventional wisdom. Prebisch’s criticisms focused on the theory of interest and the multiplier. Prebisch’s attitude in relation to Keynes can be explained by a difference in the object and method of analysis. The former’s interests focused on dynamics and cycles, themes that were peripheral to the central message and analysis of The General Theory. Notwithstanding Prebisch’s criticisms, there are several similarities between his analysis and that of Keynes.


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