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