Waves of Neoliberalism: Revisiting Authoritarian Patterns of Capitalism in South America (1930–1960)

A Digital History of Anglophone Demography and Global Population Control, 1915–1984

Japan’s encounter with deflation and near‐zero‐interest short‐term interest rates in the 1990s led to a surge in research on the implications of the zero lower bound (ZLB) on nominal interest rates for monetary policy around the end of that decade. Based on model simulations, the literature at that time identified a number of key implications of the ZLB (see Orphanides and Wieland [2000], Reifschneider and Williams [2000, 2002], Eggertsson and Woodford [2003], and references therein). First, with low inflation targets of the kind followed by many central banks, the ZLB will frequently be a binding constraint on monetary policy. That is, Japan’s example is not an outlier but rather a harbinger for the future. Second, at inflation targets of 1% or lower, lowering the inflation target comes at a cost of higher variability of output and inflation, although the effects on inflation variability are relatively small. This analysis provides an argument for maintaining a positive inflation target cushion above 1%. Third, in rare instances of severe prolonged recessions accompanied by deflation, standard open market operations will be insufficient to bring the inflation rate back to target, andalternative sources of stimulus to the economy, such as fiscal policy, will be needed. Fourth, central banks can significantly reduce the effects of the ZLB onmacroeconomic stability by modifying their policy actions and communication to the public when the ZLB threatens to constrain policy. Specifically, policies that cut rates aggressively when deflation is a risk and promise to temporarily target a higher rate of inflation following episodes where the ZLB binds were found to greatly reduce the effects of the ZLB in model simulations. In the decade since this researchwas initiated, the ZLB has gone froma theoretical issue applying to Japan to one that plagues many industrialized economies. Indeed, an era of overwhelming confidence in monetary policy’s power to tame the business cycle while delivering low and stable inflation has been replaced by fears that the global economy could

Last week, we witnessed one of the most exciting developments in monetary policymaking since the 1930s. The Japanese central bank staged an honest-to-goodness regime shift. The Bank of Japan went beyond vague promises and cheap talk. As I will describe in more detail later, it took dramatic actions and pledged convincingly to do whatever it takes to end deflation in Japan. The theoretical reasons why this regime shift may be important are well understood by economists. Persistent deflation and anemic growth suggest that Japan continues to suffer from a shortfall of demand. But their policy interest rate is already at the zero lower bound. Furthermore, riskier, long-term rates are also very low— suggesting that unconventional policies such as large-scale asset purchases are unlikely to do much to further reduce nominal rates. As discussed by Paul Krugman, Gauti Eggertsson and Michael Woodford, and others, if unconventional monetary policy can raise expected inflation, this can push down real interest rates even though nominal rates cannot fall. 1 This, in turn, can raise aggregate demand by stimulating interest

Crises in Economic Thought, Secular Stagnation, and Future Economic Research

Milton Friedman and the Road to Monetarism: A Review Essay

TWO THOUSAND AND SEVEN may seem an odd moment to question what we know about monetary policy. The past quarter-century has been about as good a run, at least in aggregate dimensions, as one is likely to get--and certainly far superior to what the early Brookings Panel participants, in the 1970s, ever thought likely. The United States has experienced only two business recessions during the last twenty-five years, neither lasting longer than eight months and neither involving a decline in total production as great as 1 1/2 percent. (1) Annual price inflation has converged onto a 1 1/2 to 2 percent norm, with the average increase apart from food and energy (the U.S. central bank's preferred measure) falling exactly in the middle of this range over the past ten years and not a single year as much as 1/4 percentage point either above or below. Neither the severe one-day stock market crash in October 1987, nor the collapse of a good portion of the nation's thrift deposit industry in the late 1980s, nor the protracted stock market decline of 2000-03, nor the quadrupling of world oil prices since 2002 had much, if any, visible impact on either aggregate nonfinancial economic activity or economy-wide inflation. Euroland and most of the world's other advanced economies have enjoyed similarly favorable rides, and even the one outstanding exception--Japan--proves the rule, in that monetary policy there was so plainly wrong-headed. Among academic economists it has become commonplace to hail the tremendous advances in knowledge about the subject, and even to refer to monetary policy, as practiced today, as a science. (2) Fiscal policy today likewise seems on a surer footing of knowledge than in earlier eras. Despite the expense of simultaneously fighting two wars, and despite a tax cut that had put the U.S. government's budget on a path toward deficit even before either war began, the ratio of the government's outstanding interest-bearing debt to national income has fluctuated narrowly within the range of 0.33 to 0.37 since the beginning of the decade. (The government's unfunded liabilities, mostly for Social Security and Medicare, are another matter, but lack of knowledge is not the problem.) The experience of 2001, recalling that of 1981, has even led to some talk of tax cuts in particular as potentially efficacious in spurring recovery from recessions. For the most part, however, fiscal policy has mostly disappeared from discussion at both the popular and the academic levels. Well-earned complacency notwithstanding, some modest reflection suggests that despite the recent gains in knowledge, several questions of some seriousness, about both monetary and fiscal policy, remain to be answered. Some are primarily conceptual, while others spring more directly from operational concerns. But in both of these policy areas, experience suggests that often what starts out as a largely conceptual inquiry leads, in time, to implications with practical import. A Conceptual Question: How Does the Central Bank Make Monetary Policy in the First Place? Most economics textbooks introduce the role of monetary policy by deriving one or more sources of demand for the central bank's liabilities: banks need reserves to satisfy reserve requirements and to settle interbank transactions, the nonbank public needs currency to conduct everyday business, and so on. The next step is to posit, reasonably enough, that the central bank is a monopoly supplier of its own liabilities and therefore can, unless directed otherwise by higher authorities, set that supply at whatever level it chooses. Because both the banks' and the nonbank public's demand for the central bank's liabilities is likely to be interest sensitive, the equilibrium of demand and supply in this market establishes the price at which these liabilities are exchanged for other assets: conceptually, some kind of interest rate. Given the role of interest rates and asset returns more generally in affecting aggregate demand, the economic consequences of monetary policy actions--that is, of changes in the supply of central bank liabilities--follow with however much elaboration seems appropriate. …

Charles W. Bergquist (1942–2020)

Introduction. Monetary and fiscal policy are the main levers of the state's influence on the economy when prompt response to a crisis caused by internal or external shocks is required. This determines the importance of theoretical substantiation of the main aspects of coordination of monetary and fiscal regulation, when the coordinated work of key state institutions is important. The purpose of the article is to clarificate the main theoretical aspects and practical mechanisms of implementing the monetary and fiscal policy of the state through the prism of interaction and coordination of the impact on the economy. Results. The role of monetary and fiscal regulation as the main directions of state influence on the economy is outlined. The modern financial theories are analyzed, which indicates serious attention paid to the coordination of fiscal and monetary policy. Monetary and fiscal regulation are considered as two components of the institutional mechanism for ensuring macrofinancial stabilization. Factors of institutional interdependence of state institutions in the process of implementing fiscal and monetary policy are systematized. Four main scenarios of combination of monetary and fiscal policy measures are defined, which determines the restrictive or expansionary nature of the impact on the economy. Factors of coordination between fiscal and monetary policy methods are considered. The elements of the technical organization of the interaction of monetary and fiscal policy, which require practical filling of the mechanism of state regulation, are substantiated. Perspectives. An important direction of scientific research for the future is the search for ways to optimize the mechanism of interaction at the institutional level of monetary and fiscal policy in the system of state regulation of the economy.

Democratic Culture and Governance is a collection of essays by prominent Latin American social scientists who were brought together by UNESCO to discuss issues of democracy at a conference held in Montevideo, Uruguay, in 1990. The organization of this conference in Latin America was a recognition of the significance of the region for the debate about the theory and practice of democratization and democratic governance. The contributors include Manuel A. Garretón, Francois Bourricaud, Torcuato Di Tella, Norbert Lechner, Michel Maffesoli, Helio Jaguaribe, Mario Dos Santos, Osvaldo Sunkel, Ariel Davrieux, Enrique Leff, Dante Caputo, Jorge Sabato, Raúl Bernal-Meza, and Luis Albala-Bertrand. The articles by these prominent Latin Americanists address three main topics: issues of transition processes, economic conditions and the dilemmas of democratic governance, and democratization in the context of international restructuring. The collection provides a sense of some of the most troubling issues affecting democracy in Latin America, especially how prominent social scientists view these problems. The articles, however, lack depth. They are short pieces that look like conference commentaries rather than carefully-thought-out scholarly articles. In this sense, the book is useful as a documentation of the relevant issues discussed at the Montevideo conference, but it cannot be viewed as a significant contribution to the academic literature on democratization processes in Latin America.Social Democracy in Latin America should be welcomed by students of comparative politics and social democracy. Outstanding social scientists from Latin America and Europe provide informative and insightful analyses of the relationship between European and Latin American social democracy. The essays can be divided into two categories. One set of articles focuses on the analysis of the social democratic experience in Europe and its relevance for Latin America; the second set examines the experiences, possibilities, and limitations of social democracy in Latin America. Contributors to the book are Tilman Evers, Kenneth Hermele, Paul Cammack, Manuel Alcántara Sáez, Pablo González Casanova, Marcelo Cavarozzi, Alex Fernández Jilberto, Luis Gómez Calcaño, Julio Cotler, Augustin Cueva, Jaime Tamayo, Fernando Henrique Cardoso, and Alain Touraine.The articles by Evers, Hermele, Cammack, and Alcántara Sáez address two main topics: the social democratic experience in Germany, Sweden, England, and Spain and the nature of the relationship between the European social democratic governments and parties and their Latin American counterparts. A major theme examined in these chapters is whether economic or political motivations accounted for the increasing interest of European social democrats in Latin America. The chapters concentrating on Latin America address more general themes, as in the chapter on the Left in South America by Cavarozzi, or concentrate on country or regional studies, including those of Chile, Venezuela, Peru, Ecuador, Central America, and Mexico.The last two chapters address questions about the challenges of social democracy in Latin America. Cardoso examines the tension between the role of the market and that of the state in the allocation of resources and the redistribution of income. In Latin America, under the present conditions of external debt and inflation, the trend has been to privatize. But while privatization in great proportion is, according to Cardoso, unacceptable, social democrats must carefully evaluate how Latin American economies can open up. The final essay, by Touraine, discusses social democracy as a political project, the various meanings of social democracy, and possible ways out of the present situation at a time when the room for positive solutions is narrow. Overall, the essays are rich in information and provide a critical outlook on the social democratic experiences in Europe and Latin America.

Church History from the International Periphery: The South American Perspective

Latin America and the Caribbean Region experienced dramatic changes in the 1990s. Politically, all but one country, are governed by a democratically elected government. Economically, import substitution industrialization policies (ISI) followed in the past, were replaced by liberalization programs aimed at reducing inflationary pressures and creating a competitive environment. The significant increase in capital flows to Latin America in one single year, 1990, buried the 1980s as the “lost decade,” and the successful implementation of privatization programs region-wide prompted to affirm that the 1990s might constitute the “Latin America's decade.” Where does the euphoria come from? Is there any implicit promise to be derived from such international capital flows? Will the pattern be sustained? Has Latin America begun a new era? Are unfolding events on defiance of fundamentals? These and many other questions can be raised regarding the spectacular transformation of Latin America and the Caribbean, particu...

Monetary and fiscal policy interactions: Evidence from emerging European economies

ABSTRACT: The purpose of the study is to analyze the relative efficacy of monetary and fiscal policies in fostering economic growth in Bangladesh concerning predictability, speed, and magnitude. Moreover, it aims to find the relationship between the economic boom of Bangladesh and two measures of macroeconomic management i.e., monetary and fiscal policy. The ARDL model and bound test are applied to examine the long-term link between monetary policy, fiscal policy, and economic growth. Data is obtained from the World Development Indicator (WDI) for Bangladesh for the period 1974 to 2022. Several diagnostics tests like CUSUM and CUSUMQ are used to identify both the strengths and weaknesses of the models. The findings demonstrated a long-term correlation between the two policies and economic growth. According to the calculated short-run coefficients, the short-term effect of fiscal policy is mentionable but the effect of monetary policy is negligible in the short term. But over time, the immediate effects become noteworthy. The long-term outcomes indicated that both fiscal and monetary policies have a favorable and substantial long-term impact on economic growth. The result shows fiscal policy is more effective compared to monetary policy for making Bangladesh, a role model of Bangladesh. Furthermore, all the diagnostics tests showed the stability of the estimated ARDL model. Expansionary fiscal and monetary policies lead to higher government spending and an increase in the money supply, which raises GDP levels. Conversely, if government spending and the money supply decline (contractionary fiscal and monetary policies), the GDP level falls. As a result, this study suggests using expansionary policies to boost Bangladesh’s economy.

There is a body of research that focuses on the examination of long-run relations between energy–environment–economic growth, and there is also a new type of recent research that focuses on the effects of monetary and fiscal economic policies on the environment. There is a research gap that exists due to omitting the effects of technology and energy policies, and this paper addresses this gap, in addition to merging both fields mentioned above, by including the asymmetric effects of fiscal and monetary policies. To explore the relations between fossil fuel and renewable energies, environmental pollution, and economic growth, in addition to including the roles of energy, technology, monetary, and fiscal policies, this paper employs novel NBARDL and NBARDL Granger Causality methods for yearly data assessments in the USA. The empirical findings of the paper point to the asymmetric impacts of monetary and fiscal policies in the short- and long-run. Interestingly, both contractionary and expansionary fiscal policies lead to higher CO2 emissions. Contractionary monetary policies exert a downward pressure on CO2 emissions, and if expansionary, the monetary policy causes environmental degradation. As an important policy, the energy policy emerges as a potent tool for reducing carbon emissions through not only renewable energy, but as a greater impact through energy efficiency and technology. Therefore, this paper highlights the importance of technology policies exhibiting varying relationships with environmental pollution, featuring unidirectional or bidirectional causality patterns. Renewable energy, energy efficiency combined with adequate technology, and energy policies are determined to have pivotal roles in CO2 emissions outcomes. Such policies should focus on cleaner energy sources accompanied by energy efficiency technologies in the USA to curtail environmental impacts; technology policies are vital in fostering innovations and encouraging cleaner technologies. The policy recommendations include an effective combination of monetary, fiscal, technology, and energy policies, backed by a strong commitment to achieving energy efficiency and renewable energy to mitigate environmental pollution and to contribute to sustainable development.

Fiscal and monetary policy plays a vital role in macroeconomic stability. The Keynesians have emphasized the fiscal policy whereas the Monetarists supported interventions under monetary policy. In fact, these policies are interrelated and influence each other. The expansionary fiscal policy overheats the economy and reduce the effectiveness of monetary policy. The use of the appropriate mix of tools under fiscal and monetary policy is of immense importance for economic stability under country specific economic conditions. Therefore, the instant study was meant to look at the effectiveness of monetary and fiscal policy instruments in stabilization of Pakistan’s economy. The data was collected from secondary sources of Government of Pakistan from 1986 to 2022. The government expenditure was analyzed to be a proxy for fiscal policy whereas money supply for monetary policy. The study employed Impulse Response Function (IRF) and Variance Decomposition (VDC) in Vector Autoregressive (VAR) Model. The findings of IRF confirmed the impact of money supply on economic growth in Pakistan. At first, the money supply affected the GDP negatively but after 3rd year, its impact was changed to be positive and it was rising sharply. It indicated that the expansionary monetary policy was effective in the medium and long run in Pakistan. It was concluded that the fiscal policy appeared to be relatively more effective for its contribution towards economic growth as compared with monetary policy.