Naked Keynesianism

I'll post a longer discussion later, but I wanted to provide a short update on the situation in Argentina. Everything indicates, as I had noted before, that the government of Macri wanted to accelerate inflation, with depreciation and an increase in the electricity bill.Macri rehired the technician (Graciela Bevacqua) that had been fired by Cristina Kirchner, and that led to the (mostly true) critique that inflation was higher than the official measure indicated.  More importantly, for a...

Aldo Ferrer and Raúl Prebisch (h/t Marcelo Rougier) I met him in a few conferences. His book on the economic history of Argentina stands with Celso Furtado's on Brazil and Anibal Pinto's on Chile as a mark of the structuralist, associated with Economic Commission for Latin America (ECLA), interpretation of economic development in the region.From the Buenos Aires Herald: "Economist and former economy minister Aldo Ferrer has died today at the age of 88. Politically related to the Radical...

There has been for quite a while now discussions on why younger voters prefer Bernie over Hillary in the Democratic contest (see this WAPO piece from last year, or this in the NYTimes, or this more recent by Nate Silver). Maybe someone already noted this before and I missed it, but it seems that the obvious answer is related to Bernie's proposals on health (Medicare for all) and education (tuition and debt free college). The other issues do not have an evident difference in their effects...

From the abstract: This paper explores zero lower bound (ZLB) economics. The ZLB is widely invoked to explain stagnation and it fits with the long tradition that argues Keynesian economics is a special case based on nominal rigidities. The ZLB represents the newest rigidity. Contrary to ZLB economics, not only does a laissez-faire monetary economy lack a mechanism for delivering the natural rate of interest, it may also lack such an interest rate. Moreover, the ZLB can be a stabilizing...

From the presentation with Esteban Pérez. The graph shows that growth in the region is increasingly tied to terms of trade changes and financial flows. This was something we discussed a few years ago here.

So last weekend I was at the Eastern Economic Association meetings, and I presented with Steve Bannister (on and off contributor to NK) a paper on Quantitative Easing in the 1930s. It's been a while since we looked at this work, which started long ago (4 years at least). One point worth noticing is that while most accounts of Eccles performance at the Fed suggest that he didn't do much (see Meltzer in his A History of the Federal Reserve), we suggest that he was crucial in pushing...

[embedded content]

I have discussed this before. I explicitly argued that this was one the GOP myths about taxes, and I lumped it together with the notion that poor people don't pay taxes (Myth #3: 50% don't pay taxes, including immigrants).  Now a report from the Institute on Taxation and Economic Policy (ITEP) seems to confirm this view.The report claims that undocumented immigrants living in the United States collectively pay an estimated $11.6 billion dollars each year in state and local taxes. And if...

British exit from the European Union (EU) is more radical than Grexit, which basically was exit from the eurozone (EZ), the currency area, but not the union. Wynne Godley, for example, was against the euro (see this), but he was not against the EU. Quite the opposite, he was pro-Europe, as were many progressive economists, several connected to Labor (Lord Eatwell being an example). The whole isue now became relevant, since David Cameron, the prime minister, set the date for a referendum on...

Source: WEO, IMF Nothing earth shattering. Just the size of the average government spending as a share of GDP between 2001 and 2015 in a few developed countries, all of which, but one, have comprehensive health coverage. So it's reasonable to assume that if the US wanted that (healthcare for all), it would have to increase spending to something closer to 40% of GDP, for all levels of government, rather than the current 35% or so. Nothing implausible about that (wink, wink, nudge, nudge,...