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Reading Keynes in Buenos Aires: Prebisch and the Dynamics of Capitalism

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  • Esteban Pérez Caldentey
  • Matias Vernengo

Abstract

Keynes had a profound influence on Prebisch in terms of the diagnosis about the main failures of market economies and the need to pursue pro-active and anti-cyclical policies. However, Prebisch was critical of some aspects of Keynes’ General Theory of Employment, Interest and Money, in particular on the theory of interest and the multiplier. His attitude can be explained by a difference in the object and method of analysis. Prebisch interests focused on dynamics and the cycle, themes that were peripheral to Keynes’ central message. Prebisch’s Keynesian influence and his rejection of some aspects of Keynes magnum opus explains why at the same time that Prebisch is often described as the Latin American Keynes, he is portrayed as concerned mainly with the long-run development problem of Latin America and without proper consideration to demand factors as fundamental determinants of output and employment.

Suggested Citation

  • Esteban Pérez Caldentey & Matias Vernengo, 2013. "Reading Keynes in Buenos Aires: Prebisch and the Dynamics of Capitalism," Working Paper Series, Department of Economics, University of Utah 2013_08, University of Utah, Department of Economics.
  • Handle: RePEc:uta:papers:2013_08
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    References listed on IDEAS

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    1. Alcino F. Camara-Neto & Matías Vernengo, 2012. "Keynes after Sraffa and Kaldor: Effective Demand, Accumulation and Productivity Growth," Chapters,in: Keynes’s General Theory, chapter 10 Edward Elgar Publishing.
    2. Cesaratto, Sergio, 1999. "Savings and Economic Growth in Neoclassical Theory," Cambridge Journal of Economics, Oxford University Press, vol. 23(6), pages 771-793, November.
    3. Palma, J Gabriel & Marcel, Mario, 1989. "Kaldor on the 'Discreet Charm' of the Chilean Bourgeoisie," Cambridge Journal of Economics, Oxford University Press, vol. 13(1), pages 245-272, March.
    4. Pérez Caldentey, Esteban & Vernengo, Matías, 2012. "Portrait of the economist as a young man: Raúl Prebisch's evolving views on the business cycle and money, 1919-1949," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    5. Esteban Pérez Caldentey & Matias Vernengo, 2012. "Heterodox Central Bankers: Eccles, Prebisch and Financial Reform in 1930s," Working Paper Series, Department of Economics, University of Utah 2012_04, University of Utah, Department of Economics.
    6. Besomi, Daniele, 2001. "Harrod's Dynamics and the Theory of Growth: The Story of a Mistaken Attribution," Cambridge Journal of Economics, Oxford University Press, vol. 25(1), pages 79-96, January.
    7. Luca Fiorito & Matías Vernengo, 2009. "The Other J.M.: John Maurice Clark and the Keynesian Revolution," Journal of Economic Issues, Taylor & Francis Journals, vol. 43(4), pages 899-916.
    8. Pérez Caldentey, Esteban & Vernengo, Matías, 2011. "Understanding the business cycle in Latin America: Prebisch's contributions," Estudios y Perspectivas – Sede Subregional de la CEPAL en México 127, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Matias Vernengo & Louis-Philippe Rochon, 2001. "Kaldor and Robinson on money and growth," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 8(1), pages 75-103.
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    Keywords

    Business Cycles; Interest Rate; Multiplier; Center-Periphery JEL Classification: B22; E32; E40; F55;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

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