My other Academia account here http://bucknell.academia.edu/MatiasVernengo
My blog http://nakedkeynesianism.blogspot.com/
Bucknell site https://www.bucknell.edu/academics/majors-and-minors/economics/faculty-and-staff/matias-vernengo.html
I taught at the University of Utah and Kalamazoo College before coming to Bucknell, and was Senior Research Manager at the Central Bank of Argentina
El articulo discute las razones para el rezago relativo de América Latina. Se sugiere que la llam... more El articulo discute las razones para el rezago relativo de América Latina. Se sugiere que la llamada trampa del ingreso medio no cumple un papel relevante para entender las causas del retroceso en la era neoliberal, y que cuestiones geopolíticas han sido indebidamente ignoradas.
An extensive and important literature has shown that the Rise of the West occurred considerably l... more An extensive and important literature has shown that the Rise of the West occurred considerably later than often thought, only in the 19th century, and that the main advantages of the West prior to that period were essentially military. However, this revisionist literature fails to incorporate the insights of radical political economics, both regarding money and the role of demand in technological progress, in ways that distort their conclusions. This paper suggests that both revisionists and radical political economists would benefit from each other's insights. During the last few decades our understanding of the Rise of the West has been reshaped by economic revisionist works 1 by both historians and economists, especially the seminal works by
Investigación económica / Escuela Nacional de Economía, Universidad Nacional Autónoma de México
This paper analyzes the interaction between exchange rate, interest rate, and monetary policy in ... more This paper analyzes the interaction between exchange rate, interest rate, and monetary policy in Brazil. Higher rates of interest lead to an increase in the financial burden of debt, and as a result to an increase in budget deficits. Also, high rates of interest attract capital inflows, leading to an appreciation and a reduction of the payments on debt in domestic currency. The net effect of higher rates of interest on public debt depends on the relative strength of both effects. Our analysis shows that, under specific conditions regarding the size of passthrough effects and the elasticity of public debt to changes in the rate of interest, the control of the exchange rate allows controlling both inflation and the debttoGDP ratio.
This paper provides a rejoinder to Colander, Holt and Rosser (2010) strategy to win friends and i... more This paper provides a rejoinder to Colander, Holt and Rosser (2010) strategy to win friends and influence mainstream economics. It is suggested that their strategy is counter-productive, and while it might gain them friends, it will not lead to increased influence of heterodox ideas within what they term the cutting edge of the profession. It is argued that their failure to understand the nature of heterodoxy, and the reason for the eclecticism of the mainstream, associated to the rise of vulgar economics, undermines their arguments.
One measure of the health of the Social Security system is the difference between the market valu... more One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use market value. Since claims on accrued benefits are not currently traded in financial markets, we cannot directly observe a market value. In this paper, we use a model to estimate what the market price for these claims would be if they were traded. In valuing such claims, the key issue is properly adjusting for risk. The traditional actuarial approach – the approach currently used by the Social Security Administration in generating its most widely cited numbers - ignores risk and instead simply discounts “expected†future flows back to the present using a risk-free rate. If benefits are risky and this risk is priced by the market, then actuarial estimates will differ from market value. Effec...
The impression the IMF creates with its reports is akin to that of the pro- fession as a whole, w... more The impression the IMF creates with its reports is akin to that of the pro- fession as a whole, which was unable to revise its own principles and admit the significant problems with the dominant paradigm, even in the face of the Global Crisis of 2008.
El articulo discute las razones para el rezago relativo de América Latina. Se sugiere que la llam... more El articulo discute las razones para el rezago relativo de América Latina. Se sugiere que la llamada trampa del ingreso medio no cumple un papel relevante para entender las causas del retroceso en la era neoliberal, y que cuestiones geopolíticas han sido indebidamente ignoradas.
An extensive and important literature has shown that the Rise of the West occurred considerably l... more An extensive and important literature has shown that the Rise of the West occurred considerably later than often thought, only in the 19th century, and that the main advantages of the West prior to that period were essentially military. However, this revisionist literature fails to incorporate the insights of radical political economics, both regarding money and the role of demand in technological progress, in ways that distort their conclusions. This paper suggests that both revisionists and radical political economists would benefit from each other's insights. During the last few decades our understanding of the Rise of the West has been reshaped by economic revisionist works 1 by both historians and economists, especially the seminal works by
Investigación económica / Escuela Nacional de Economía, Universidad Nacional Autónoma de México
This paper analyzes the interaction between exchange rate, interest rate, and monetary policy in ... more This paper analyzes the interaction between exchange rate, interest rate, and monetary policy in Brazil. Higher rates of interest lead to an increase in the financial burden of debt, and as a result to an increase in budget deficits. Also, high rates of interest attract capital inflows, leading to an appreciation and a reduction of the payments on debt in domestic currency. The net effect of higher rates of interest on public debt depends on the relative strength of both effects. Our analysis shows that, under specific conditions regarding the size of passthrough effects and the elasticity of public debt to changes in the rate of interest, the control of the exchange rate allows controlling both inflation and the debttoGDP ratio.
This paper provides a rejoinder to Colander, Holt and Rosser (2010) strategy to win friends and i... more This paper provides a rejoinder to Colander, Holt and Rosser (2010) strategy to win friends and influence mainstream economics. It is suggested that their strategy is counter-productive, and while it might gain them friends, it will not lead to increased influence of heterodox ideas within what they term the cutting edge of the profession. It is argued that their failure to understand the nature of heterodoxy, and the reason for the eclecticism of the mainstream, associated to the rise of vulgar economics, undermines their arguments.
One measure of the health of the Social Security system is the difference between the market valu... more One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use market value. Since claims on accrued benefits are not currently traded in financial markets, we cannot directly observe a market value. In this paper, we use a model to estimate what the market price for these claims would be if they were traded. In valuing such claims, the key issue is properly adjusting for risk. The traditional actuarial approach – the approach currently used by the Social Security Administration in generating its most widely cited numbers - ignores risk and instead simply discounts “expected†future flows back to the present using a risk-free rate. If benefits are risky and this risk is priced by the market, then actuarial estimates will differ from market value. Effec...
The impression the IMF creates with its reports is akin to that of the pro- fession as a whole, w... more The impression the IMF creates with its reports is akin to that of the pro- fession as a whole, which was unable to revise its own principles and admit the significant problems with the dominant paradigm, even in the face of the Global Crisis of 2008.
The paper analyzes briefly the changing ideas on the role of money and banks from William Petty t... more The paper analyzes briefly the changing ideas on the role of money and banks from William Petty to Thomas Tooke, including the works of Adam Smith, David Ricardo, and Karl Marx. It analyzes the role of ideas in shaping the evolution of central bank regulation. Particular importance is given to the Bank of England's inconvertibility period, from 1797-1821, and the ensuing debate in shaping Robert Peel's Bank Act of 1844, which is often seen as the birth of modern central banking. The importance of the Say's Law, and the absence of an alternative theory of the determination of output, is shown to play an essential role in the policy prescriptions of the so-called Bullionist authors, that won the debates that shaped central banking practices in the 19th century. The paper concludes with a brief analysis of what is a central bank according to the dominant (marginalist) mainstream of the profession, and what an alternative conception based on what may be termed classical-Keynesian political economy would be.
This paper analyzes the revisionist literature on the Rise of the West. Revisionist authors sugge... more This paper analyzes the revisionist literature on the Rise of the West. Revisionist authors suggest that the so-called Great Divergence is relatively recent, and that good luck – in the form of silver from the Americas, and abundance of coal, rather than European exceptionalism – was central for the higher rates of growth of GDP in the West. This paper argues that while the revisionist literature provides relevant critiques of conventional accounts of the Rise of the West, it remains rooted in marginalist or neoclassical views of both the role of money and technological progress, and that abandoning these theoretical foundations would strengthen some of its arguments.
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Papers by Matias Vernengo