Saturday, December 27, 2014

Matias Vernengo — The meaning of Structuralism: a very short reply to Krugman

By the way, his lack of appreciation for Structural theories of inflation is also based on this obsession with the Natural Rate. For him all inflation is caused by excess demand (it turns out that Krugman is a Monetarist). Latin American structuralists pointed out that the changes in the structure of production created cost push causes for inflation. Logic and evidence suggest that they were right. By the way, same reason you shouldn't, as Krugman isn't, afraid about inflation in the US right now. Not close to full employment, and bargaining power of labor class at all time low, with no wage cost pressures. For a slightly longer discussion see this entry on the meaning of structuralist macroeconomics, and thisone on the evolution of Latin American Structuralism which is still around (yep, the news of our demise are greatly exaggerated).
Naked Keynesianism
The meaning of Structuralism: a very short reply to Krugman
Matias Vernengo | Associate Professor of Economics, Bucknell University

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