Monday, March 9, 2015

The vulture passes

Yep, not the condor. So it's my short note in Página/12 (in Spanish), the Argentine newspaper, on the future of the external debt negotiations. Note that the short summary on top suggests, since this is a debate, that the return of a neoliberal project would lead to increasing external debt. And that might be true, yet, as I note in my piece it is not true that external debt is always bad, since one can use it for diversifying exports (and reducing structural heterogeneity), reducing imports (the old import substituting industrialization strategy) and making the balance of payments more sustainable in the long run.

I might add then that the use of foreign debt, with caution, is not necessarily neoliberal. At any rate, neoliberal is a complicated term, often used to refer to things one does not like. Unlike neoclassical economics (or marginalism more properly) it does not have a precise meaning. I would imagine that in this context is used to refer to pro-business, pro-liberalization, laissez-faire policies that characterized the Washington Consensus and the 1990s in Argentina. And yes that would be a terrible model to go back to.

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