Power – The bête noire in much of modern economics Heinz D. Kurz

Despite being a pervasive phenomenon in the economy and society, power has been and still is the bête noire in much of modern economics. In the main parts of contemporary mainstream economics, no attempt is made to come to grips with what power means and what its effects are. Against this backdrop, this paper attempts to bring to the fore ideas of past economists and social and political philosophers, who basically saw socio-economic affairs and outcomes as driven by, and reflecting, power relationships. Starting with the writings of late mercantilist and early classical economists, the paper analyses how the attention…

The Evolution of Inequality in Latin America in the 21st Century: What are the patterns, drivers and causes? Francesco Bogliacino and Daniel Rojas Lozano

The paper analyses the evolution of inequality for the largest economies of the Latin American region in the 21st century, with separate consideration of income and wealth. The drivers of changes in inequality and possible underlying causes are examined, including the role of the new wave of leftist governments. The evidence reveals that income inequality decreased, though wealth inequality displayed a much less homogeneous pattern. Statistically, the decrease in inequality is associated with labour market changes, and especially with State redistribution through subsidies. Wealth inequality is mainly correlated with the change in the share of financial wealth. A possible causal…

Changing Challenges in the Modernization of Development Banks in Latin America: The case of Nacional Financiera, Mexico’s key Development Bank Juan Carlos Moreno-Brid, Esteban Perez Caldentey and Laura Valdez

Development banks in Latin America were traditionally given the key role of creating markets by funding long-term capital accumulation—on many occasions with State-owned enterprises in new sectors or strategic activities, besides deepening the financial system. With the implementation of Washington Consensus policies in the 1990s,development banks assumed the function of free market subsidiary institutions whose main goal is to solve market imperfections. Mexico´s Nacional Financiera exemplifies this Copernican turn in policy making. From being Mexico’s key policy bank for development, NAFINSA was transformed into a second-tier financial intermediary oriented to ease MSMEs’ access to financial resources, essentially through innovative Factoring…

Asymmetric Exchange Rate Policy in Inflation Targeting Developing Countries Ahmet Benlialper, Hasan Comert and Nadir Ocal

Most of the developing countries that adopted inflation targeting experienced large appreciations in their currencies before the global crisis. This paper examines whether central banks in developing countries have different policy stances with respect to depreciation and appreciation in order to hit their inflation targets. 01_2017  (Download the full text in PDF format)

The Impacts of the 2008 Global Financial Crisis on Developing Countries: The case of the 15 most affected countries Hasan Comert and Esra Nur Ugurlu

[Working Paper No. 03/2015] From their analysis of the impact of the recent global crisis, the authors show that the trade channel was the most important mechanism in the transmission of the crisis from advanced economies to developing countries. WP_03_2015 (Download the full text in PDF format)

Integration, Spurious Convergence, and Financial Fragility: A post-Keynesian interpretation of the Spanish crisis Esteban Perez Caldentey and Matias Vernengo

[Working Paper No. 02/2015] The authors argue that the Spanish crisis resulted from a widening deficit in the non-financial corporate sector and a declining trend in profitability under a regime of financial liberalization and loose and unregulated lending practices. WP_02_2015 (Download the full text in PDF format)