Debt cycles and the long term crisis of neoliberalism

My talk at the IDEAS/PERI conference a few weeks ago. As I said there, I hate to be the optimist in the room, but I'm a bit more skeptical about the risks of a generalized sovereign debt crisis in the Global South. The two papers I cite are these (in their PERI Working Paper versions) two (one and two).

Esteban Pérez Caldentey on the Ideas of Raúl Prebisch

Esteban Pérez's talk at the University of Chile, about Raúl Prebisch, about whom we have written several papers. This is in Spanish.

Keynes’ denial of conflict: a reply to Professor Heise’s critique

Tom Palley reply to response about his paper on Keynes lack of understanding of class conflict. In many ways, this is how Tom discusses Keynes lack of understanding of old classical political economy. Tom is correct in pointing out that:

"Kalecki (1933 [1971]) began the process of incorporating conflict into the Keynesian paradigm, but there is much more to be done regarding recognizing conflicts’ implications for economic theory and recognizing the multiple fora in which it appears."

Of course, Kalecki was building on Marx and classical political economy. Read the full reply here.

The Argentina of Javier Milei

A seminar organized by the Association for Heterodox Economics with myself, Ramiro Álvarez and the Argentine Senator Carolina Moisés.

Atonella Stirarti's Godley-Tobin Lecture

There was a problem during the 7th Godley-Tobin Lecture. I disconnected everyone when I was trying to fix a problem with Professor Stirati's presentation, and I didn't notice until much later. The worst part is that the recording was lost. I'm posting here the PowerPoint presentation for those interested. We will also post the link for the published version of the lecture, which will be open also on the website of the Review of Keynesian Economics (ROKE).

On the Heritage Foundation Freedom index

My interview with Rick Smith on the Heritage Foundation Index and its tenuous relationship with anything that can be called freedom, economic or otherwise.

Association for Heterodox Economics' Webinar: The Argentina of Javier Milei

 April 16th 2024 10am New York / 3pm London

Since the beginning of the military dictatorship in March 1976, pro-market visions were imposed by violating human rights in the darkest period of Argentina’s history and occupied political thought for more than four decades, even in democracy. Although these ideas had a brief pause in the period 2003-2015, they are still in force and now more than ever under the new administration of Mr. Milei. Mr. Milei has imposed a huge depreciation of the national currency, reducing the purchasing power of workers, and an adjustment of public spending by dismissing more than 50,000 public employees under the slogan of efficiency. Inflation has reached 200% per year and poverty has reached 60% under his administration, which has been in place for less than 5 months. As a heterodox community, we wish to better understand the social and economic consequences of the Milei government and discuss the possible alternatives Argentina now faces. Zoom Registration here.

Speakers:

Ramiro Álvarez is a postdoctoral fellow at the Centre for Political Economy and Development Studies at the National University of Moreno (Argentina). He is a specialist in the Political Economy of Argentina. After his Master in Economic Development at the National University of San Martín (Argentina) he did his PhD at the University of Siena (Italy). Ramiro teaches basic and advanced economics at different Argentinean universities. He has been a guest professor at the Autonomous University of Santo Domingo due to his studies in Political Economy and he published many papers analysing the political “pendulum” in Argentina, and its impacts on income distribution and growth.

Matías Vernengo is Full Professor at Bucknell University. He was formerly Senior Research Manager at the Central Bank of Argentina (BCRA), Associate Professor of Economics at the University of Utah, and Assistant Professor at Kalamazoo College and the Federal University of Rio de Janeiro (UFRJ). He has been an external consultant to several United Nations organizations including the Economic Commission for Latin America and the Caribbean (ECLAC), the International Labor Organization (ILO), the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Program (UNDP). He has eight edited books, two books and more than one hundred and twenty articles published in scientific peer reviewed journals or book chapters. He specializes in macroeconomic issues for developing countries, in particular Latin America, international political economy and the history of economic ideas. He is also the emeritus founding co-editor of the Review of Keynesian Economics (ROKE), and co-editor in chief of the New Palgrave Dictionary of Economics.

María Carolina Moisés is a distinguished Argentine politician and political scientist with a rich career dedicated to public service and political advocacy. Beginning her political journey with foundational education from the University of Belgrano, where she earned a degree in Political Science, she has been a pivotal figure in Argentine politics. Her early academic achievements were complemented by international exposure through a program at the University of Berkley, Boston, which broadened her perspective on governance and public policy. Carolina’s political career is marked by her tenure as a National Senator for Jujuy since December 10, 2023, showcasing her continued relevance and leadership in Argentine politics. Prior to this role, she served as a National Deputy for Jujuy from December 18, 2017, to December 10, 2023, and previously from December 10, 2005, to December 9, 2009, where she was known for her passionate advocacy and significant legislative contributions, including her involvement in the landmark Audiovisual Media Law. As a speaker, María Carolina Moisés brings a wealth of experience, a profound understanding of political dynamics, and a visionary approach to addressing contemporary challenges. Her career is a testament to her unwavering dedication to public service, making her an inspiring figure in Argentine politics and beyond.

Beyond the NAIRU, 7th Godley-Tobin Lecture by Antonella Stirati

 

The 7th Godley-Tobin Lecture in a bit more than a week. For those not in Boston registration here.

On the possibility of a recession at the Rick Smith Show

My brief interview at the Rick Smith Show on the likelihood of a recession this year, and the unfounded fears about public debt in the United States.

Dollar Hegemony and Argentina

First part of a two part interview with Anita Fuentes at Security in Context. The discussion on Argentina and Milei is in the next part. I'll post it as soon as it is up.

On the New Argentine Pendulum

A short paper for FIDE on the so-called Argentine pendulum. The pendulum was the phrase used by Marcelo Diamand to discuss the persistent boom and bust cycles associated with left of center developmentalist governments, and liberal governments that promoted adjustment. The suggestion in this paper is that in reality the previous pendulum was mostly political, and about constraining the left of center ability to redistribute income (higher wages), often restricting democratic institutions. The New Pendulum refers to the period that starts with the last dictatorship, in which alternative economic projects (in which deindustrialization plays a major role) explain the main oscillation. Milei is just one more movement of the pendulum. Full paper (in Spanish) here.

Tom Palley on "Israel’s genocide, US assistance, and consequences thereof"

By Tom Palley

South Africa has now presented its charge of Israeli genocide in the International Court of Justice (ICJ), and Israel has presented its rebuttal. Regardless of the ultimate judgment, a page has been turned. Israel’s actions in Gaza, assisted by the US, have changed the geopolitical landscape. The consequences stand to be dire and lasting.

The case against Israel

The case against Israel is stark and simple. The argument in descending order of import is as follows.

First, and foremost, is Israel’s disproportionate response and application of collective punishment. Hamas is a criminal terrorist organization, not a state. Israel has a right to appropriate self-defense, but it has no right to kill vast swathes of non-combatant Palestinians as it tries to combat a criminal organization. The indiscriminate killing constitutes a war crime and crime against humanity. It becomes genocidal when paired with denial of means of survival.

Second, razing Gaza to the ground and intentionally driving an entire population into the unprotected open guarantees large scale death from lack of shelter, hunger, and sickness. It echoes the Armenian genocide of 1915.

Third, the razing of Gaza fits with an Israeli plan for mass expulsion of Palestinians, a sort of Israeli final solution to the Gaza problem. Such a plan has long been popular in Israel, predates the Hamas attack, and fits with Prime Minister Netanyahu’s October 28th quotation of the Bible whereby God ordered the Israelites to eradicate the Amalekites: “Now go and smite Amalek, and utterly destroy all that they have, and spare them not; but slay man and woman, infant and suckling.” That record is suggestive of ethnic cleansing which turned genocidal in the wake of the October 7th attack.

Fourth, during the conflict, dehumanizing videos have emerged of Israelis celebrating the killing of civilian Palestinians, mocking Palestinian suffering, vandalizing Gazan shops, and desecrating mosques. Israeli Defense Minister Yoav Gallant described Palestinians as “human animals”. Dehumanization is always part of the story with genocides. Furthermore, Israel’s shooting of Israeli hostages waving a white flag who had escaped from Hamas, shows Israel’s take no prisoners tactics which violate the Geneva conventions. All are part of the mindset informing Israel’s actions.

Some claim every Palestinian is a potential terrorist and legitimate target. Not only is that grotesquely specious, it also tacitly justifies Hamas’ murders on grounds that every adult Israeli is a soldier. The horror of Hamas’ October 7th attack may explain the Israeli public’s desire for revenge and retribution, but it provides no legal justification for mass murder.

Read rest here.

Demand-led Growth In Rio

The Review of of Keynesian Economics is co-sponsoring the Fifth Conference on Demand-led Growth in Rio, next July 11 and 12.

2024 marks the 45th anniversary of Thirlwall’s classic 1979 paper that introduced Thirlwall’s law as well as the 75th anniversary of Prebisch’s manifesto on the main development problems of Latin America. These seminal works were key, for post-Keynesian and structuralist literatures, to put the balance of payments constraint at the center and as one of the main problems of long run growth and development. Furthermore, it was an important critique and alternative to the mainstream view that highlights factors of production scarcity as the only explanation to long run growth.

As a result, many demand-led growth theories often emphasize the balance of payments as the main constraint that an economy faces in the long-run. Among the various subjects that balance of payments constraint literature treat, we can name: The role of financial flows in the long run; External indebtedness; Solvency and liquidity problems; Currency hierarchy; The role of the exchange rate; The relation between balance of payments constraint and economic policy, and many others.

All these themes are related with the research lines of the Group in Political Economy at the Institute of Economics of the Federal University of Rio de Janeiro, which follows the Sraffian framework proposed by Garegnani to make the Keynesian-Kaleckian principle of effective demand compatible with the classical surplus approach. For our Group, growth is demand-led and policy (often balance of payments) constrained. In succession, inflation is a cost-push political economy phenomenon dependent upon conflicting claims over income distribution. Within this framework, macroeconomic policies are fundamental to growth, inflation, and income distribution. In capitalist economies, these policies arise from institutional arrangements as well as political power relations. The Research Group in Political Economy considers that constructing policy-relevant analysis and theoretical and applied models to better understand advanced and developing countries’ actual performance demonstrates this theoretical approach’s soundness.

Given the approach taken by the Group and in the context of the intensification of dialogue and convergence among some Post-Keynesians, Kaleckians, Kaldorians, practitioners of Modern Monetary Theory, and Sraffians, the goal of the 2024 Edition of the Workshop is to strengthen this promising trend by promoting a constructive and policy-relevant debate among these strands of critical thought. Other heterodox approaches to economics are also welcome and encouraged in fostering new contributions concerning demand-led growth analyses, models, their multiplicity of relations with monetary and financial elements and external constraints to growth.

More info here.