Government Borrowing In Foreign Currency— Ramanan

Argentina.

The Case for Concerted Action
Government Borrowing In Foreign Currency
V. Ramanan

Matias Vernengo — Overdose of heterodoxy, failed Keynesian policies or same old balance of payments constraint

Ricardo Hausmann blames the situation in Venezuela to excessive heterodox policies. The piece is not particularly well written, but if you look for the deep cause of the crisis, according to Hausmann, then you must conclude that it is a fiscal one. The government spent too much, and got into too much debt.…

So fiscal problems, too much spending and borrowing, too much money printing, which caused inflation and the currency crisis (the black market gap between the official and parallel value of the domestic currency). As I have discussed in many posts (too many to link) and in a recent paper causality is upside down.…

Naked Keynesianism
Overdose of heterodoxy, failed Keynesian policies or same old balance of payments constraint
Matias Vernengo | Associate Professor of Economics, Bucknell University

David F. Ruccio — Does capitalism cause poverty? Let us count the ways

Clearly, Pope Francis’s criticisms of capitalism (as I have discussed here and here) have touched a nerve. They certainly have in the case of Harvard’s Ricardo Hausmann, who attempts to argue both that capitalism is not responsible for causing poverty and that more capitalism will eventually eliminate poverty.

Hausmann’s story is a very familiar one. What it comes down to is the idea that the majority of people before capitalism arrived one the scene were poor and as capitalism develops and more and more people became wage-laborers with rising real wages. But areas of the world still remain outside of capitalism and those people will remain poor unless and until capitalism is allowed to fully develop.

It’s a story that is as old as Adam Smith’s Wealth of Nations, and it’s been told and retold by generations of classical and neoclassical economists ever since.
Their story is certainly right about one thing: capitalism does create the promise of ending poverty.

The problem is, their story conveniently overlooks important aspects of the development of capitalism—all the ways capitalism has over the course of its history created more, not less, poverty. I’m thinking of four instances in particular.…

Occasional Links & Commentary
Does capitalism cause poverty? Let us count the ways
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Brad DeLong — Technology: Its Identity, Its Diffusion, and the Near-Bankruptcy of Modern Economic Theory

Deconstructing technology.

Technology is more than neat stuff. Obviously, it's dependent on technological know-how, now being touted in education as STEM.

However, it is more than technological know-how, too. It is organizational ability. The great generals (strategos means general in Greek) of the past showed this to be the case in defeating more numerous opponents. It was the secret of the Roman empire that allowed them to dominant the known world in their day.

Management is an integral element of capital. The early capitalists possessed it themselves, and the later ones have hired it and cut it in to the return on capital. This clearly has an impact on capital share versus labor share.

WCEG — The Equitablog
Technology: Its Identity, Its Diffusion, and the Near-Bankruptcy of Modern Economic Theory
Brad DeLong