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Matias Vernengo

Matias Vernengo

Econ Prof at @BucknellU Co-editor of ROKE & Co-Editor in Chief of the New Palgrave Dictionary of Economics

Articles by Matias Vernengo

Diego Maradona (1960-2020): Some Bittersweet Reflections

6 days ago

By Thomas Palley (guest blogger)Maradona was more than just an extraordinary footballer. He was also a complicated social icon. That further distinguishes him from other footballers, though Pele also has some of that… and it is great to see young footballers like Marcus Rashford taking up that mantle.He was both rewarded by and terribly exploited by the system. The system treated him like a “race horse”. They wanted him to play at all cost and pumped him with drugs. They did not care about the physical and psychological costs to him. That contributed to his addiction. Maybe he would have gotten there on his own owing to personality reasons, but the addictive pain-killers they fed him sure gave him a healthy shove in that direction.He came from great poverty, from a shanty town. He never

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Capitalism Alone Against Itself: Liberal Democratic versus Political Capitalism

15 days ago

I finished Branko Milanovic’s thought provoking Capitalism Alone this summer. But I haven’t had much time to write on the blog, as you might have noticed. This is certainly not a review, and I would definitely suggest that you go and buy the book as soon as you can and read it. It is a serious discussion of the future of capitalism, that word that, as Heilbroner often reminded us, was at the center of the discipline, but seldom discussed openly by economists. He cited, if memory doesn’t fail me that it didn’t appear in Mankiw’s Principles textbook, at least back then in the 1990s, when it was published. I always note that Allan Meltzer wrote a little book titled Why Capitalism? were he makes no explicit effort in defining it, even though a definition can be gleaned from it.*The definition

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Is the Worldly Philosophy Dead?

26 days ago

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Instead of videos a series of podcasts on the history of political economy, and its relation to economic policy in the United States. This is based on a course I teach for undergraduates.

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Esteban Pérez on John Maynard Keynes

October 31, 2020

One of my favorite economists, and John Maynard Keynes too. Don’t miss this lecture, in Spanish of course, on one of the central economists of the 20th century and its relevance for the periphery, particularly during the current pandemic. I’ll post links to the Zoom and Facebook stream soon.

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The problems of Neoliberalism in Latin America

October 27, 2020

[embedded content] My talk with Luis Nassif (in Portuguese) about neoliberalism in Latin America. We didn’t really get to discuss the current cases of Argentina, Bolivia, and Chile, but talked about it more generally.

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Affordable Housing Problems and Solutions: The Utah Case

October 24, 2020

David Fields (Guest blogger)Rising housing costs and stagnating real wages are the primary causes of worsening housing affordability in Utah. The dismal wage growth is the result of a larger nationwide upward redistribution of wealth and income, which can be attributed to the following: a failure to adhere to full employment objectives; fiscal austerity; and various labor market policies and business practices allowing the higher social strata of a professional class to capture ever larger shares of economic growth. This is the result of institutional transformations that have exposed workers to the vulnerability of higher turnover, resulting in higher averages of unemployment, particularly worsened by the COVID-19 pandemic induced recession. For instance, from 2009 to 2016 real income

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Tom Palley on What’s wrong with Modern Money Theory

October 22, 2020

In the new issue of the Review of Keynesian Economics. From the abstract:The essential claim of Modern Money Theory (MMT) is sovereign currency issuing governments, with flexible exchange rates and without foreign currency debt, are financially unconstrained. This paper analyses the macroeconomic arguments behind that claim and shows they are suspect. MMT underestimates the economic costs and exaggerates the capabilities of deficit-financed fiscal policy. Those analytic shortcomings render it poor economics. However, MMT’s claim that sovereign governments are financially unconstrained is proving a popular political polemic. That is because current distressed economic conditions have generated political resistance to fiscal austerity, and MMT fits the moment by countering the neoliberal

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Production of Commodities at 60

September 25, 2020

Video of the conference, without the long part before it starts that was on the Review of Keynesian Economics Facebook page.[embedded content]
At any rate,the three presentations by professors Serrano, Palumbo and Nell.

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Reflections after a Post Keynesian Workshop

August 25, 2020

Jessica Finnamore (Guest blogger)Heterodox economics refers to any school of thought which is not accepted by the economic mainstream, or neoclassical economics. Post-Keynesian economics is a heterodox school of thought which believes (amongst other things) in high levels of government intervention, fundamental uncertainty, and that the economy is demand-driven rather than supply-constrained (as neoclassical economics says). Keynes himself was concerned with creating theories which were realistic and was even willing to reject theories he had previously supported if empirical evidence disproved them.Some Post-Keynesian ideas have been adopted into the mainstream; following the 2008 financial crisis, the mainstream had little to no explanation for what had caused the housing market crash

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Reflections after a Post Keynesian Workshop

August 23, 2020

Nicole L. Kormann da Silva (Guest Blogger)I am from Brazil and I did my bachelor’s degree at Universidade Federal de Santa Catarina. I would say the course there can be relatively multidisciplinary and open to alternative approaches, but macroeconomics was mainly restricted to conventional textbooks and it was only during other classes like Political Economics and Economic Development of Brazil that some insights came across my mind: it was possible – and in fact there was already a structured body of work on it – to perceive economics from another starting point.For me heterodox economics is a pluralist umbrella under which, among other schools, you find Post-Keynesian economics – PKE. I would say heterodox economics give us the possibility to rethink economics in a more realist term and

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World-Systems Analysis in a Critical Juncture

August 23, 2020

The 44th Annual Conference on the Political Economy of the World-System takes place during a critical juncture for both the field of world-systems analysis and for the world-system itself. The first four sessions of the conference bring together papers that reconstruct the theoretical and methodological lineages of world-systems analysis by recuperating neglected foundational texts and by putting the world-systems perspective into dialogue with other critical approaches in the social sciences. The next four sessions deploy tools provided by a world-systems perspective to analyze the multiple intertwined social, political, and economic challenges of the current juncture, illuminating the global crisis and unfolding systemic chaos.For registration and the program go here.

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Reflections after the Post Keynesian Economics Workshop

August 22, 2020

By Santiago Graña Colella (Guest blogger)During my bachelor’s degree, I have little access to heterodox literature. What is worst, in most subjects, it was explained that the economy works in a particular fashion everywhere and every time, but without stating that this way was one interpretation of the economy, particularly the neoclassical interpretation. Consequently, most students do not know many alternatives to the economic theory thought to them and after five years (in Latin America) end up thinking that the economy works as in a neoclassical world and that any attempts of applying alternative economic policy it is following an ideological foundation. In this sense, I think it is important to promote heterodox ideas, because it allows critical students to know which schools of

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Mainstream Economics/Sold Out?

August 22, 2020

I recently taught a short workshop (online) on Post Keynesian Economics (PKE) for Summer Academy for Pluralist Economics. I basically discussed the definitions of heterodox and Post Keynesian economics, and some critical issues in the theory of output, employment, money and inflation, and income distribution and growth. Students were from several countries, backgrounds, disciplinary fields and stages in their academic careers (from undergraduates to PhD candidates). I will post some brief reactions from a few students on their views on PKE and how they got interested in it, which I think might be of interest, since many have told me over the years that this blog was the only source they had on heterodox economics.

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Friedman vs. Wicksell

August 12, 2020

Slowly, but steadily the Wicksellian concept of a natural, normal or neutral rate of interest is making a come back and becoming more relevant and cited than Friedman’s natural rate of unemployment and its awkward twin the Non Accelerating Inflation Rate of Unemployment (NAIRU).Note that up to Friedman’s infamous presidential address the normal rate dominated the field. But in all fairness, even thought it has lost space it seems that Friedman’s natural rate of unemployment has a lot of inertia, and might be with us for a while.

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60 Years of Sraffa’s Production of Commodities by Means of Commodities/ROKE Webinar

July 21, 2020

Tomorrow we will talk about this book that is the Rosetta Stone of the history of economic ideas (read post 6 below for more on that). I’m happy to have a great panel to discuss it. In the meantime below 7 previous posts on Sraffa’s contributions to economics, which might be helpful for some.Sraffa and the Marshallian System
Sraffa, Marx and the Labor Theory of Value (LTV)
Sraffa, Ricardo and Marx
The Standard Commodity and the LTV
The Capital Debates
Microfoundations of Macroeconomics and the Capital Debates
Free Trade and the Capital Debates

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Policies for Prosperity

June 25, 2020

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The webinar on Policies for Prosperity organized by LP Rochon, and with Tom Ferguson, Mario Seccareccia, and Anna Maria Variato. There was some glitchy at the beginning and Tom’s talk was not recorded. Mine starts in minute 29.

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Power and dominance in the Colonial and Post-colonial times

June 24, 2020

By Sunanda Sen (guest blogger)The recent uprising and protests, in a large number of the White-settled countries in connection with the murder of an unarmed Black-American, George Floyd by a White policeman on duty in Minneapolis has re-opened pages of history relating to unequal power , with state- sanction of White supremacy over ‘others’ having a subordinate status. As history unfolds it, the over-powered included the slaves acquired from Africa, the indentured labour shipped from tropical Asia, while colonies like India providing the flow of unpaid ‘drain’ of surpluses from taxes collected within. The pattern of racial dominance seems to have continued , even today, in the incapacitated George Floyd’s choking to death.One observes the vehement reactions to the murder on part

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Di Bucchianico on Krugman and the Liquidity Trap

June 19, 2020

New paper on the problems of Krugman and the Liquidity Trap argument (some will be able to download if for free, and I recommend this version; however, there is a previous working paper linked at the bottom for those unable to open).From the abstract:
Krugman’s ‘liquidity trap’ model constituted a ground-breaking contribution by attributing the long-lasting Japanese stagnation to a negative natural interest rate. Our critique to such a proposal will focus on three aspects. First, we will question the logical structure of the model, providing an alternative interpretation of its closure and arguing that aggregate demand has no crucial role in it. Second, we will argue that a negative natural interest rate can emerge only after a series of overtly restrictive assumptions in a model that

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