Paul Krugman on the mistakes of macroeconomics

Paul Krugman has succeeded once again in explaining the basic conflicts in economics in a simple way. In Saturday´s article on the crisis in the NYT, he explains the conflict between New Classical Economists and New Keynesian Economists and he even recognize the mistakes of the latter. He also makes sensible proposals for the evolution of mainstream macro... AND YET what is most surprising is his total unwillingness to recognize the extensive work of heterodox economists (post-Keynesian in particular), who have done extensive work on the problems of financial markets and the instability of the capitalist economies. It is still surprising how mainstream economists forget the work at the fringes... and very sad for the future development of the discipline.

Leaving Guatemala (initial reactions)

Just two weeks do not allow you to understand a contradictory and fascinating country like Guatemala. They are a good start, however, to try to understand the reasons behind the violent past and the difficult present of Central America in general, and Guatemala in particular. After talking with people, reading a little and observing as much as I could, it is clear that: (a) A stronger and more effective state is a necessary but not sufficient condition for development; (b) We need to think harder about the links between multiculturalism, development and state policy; (c) It is important to complement our understanding of macro-processes of development with a solid analysis of all the micro-initiatives to promote "progressive change". This and much more is something that we all need to reflect, using as much as possible a comparative perspective.

More on Guatemala

This is a great country with a lot going on. Nevertheless, I am still amazed with the behaviour of the business class and the ideological content of public debate. Today an influential talk show quoted the Heritage Foundation and criticized a small expansion of public debt... in the midst of the crisis!

From Guatemala

My wife and I travelled yesterday to Guatemala where I will visit friends, give a three day workshop and do some interviews. It is an exciting opportunity to learn more about Central America?s current (difficult) situation. I was strike by how conservative business leaders are in this country! A couple of them were yesterday on TV claiming that the government had already distributed enough land because it had given 240 plots in the last ten years! Amazing!

"Tele-Golpe" in Honduras

The Costa Rican newspaper La Nacion has an interest article on the way in which anti-coup groups are disseminating the information. They have a link to a video that is worth seeing--check here.

Honduras

My colleague and friend Salvador Marti and I just published an Op-Ed on the coup in Honduras We believe that we need to pay less attention to Chavez and more attention to the quality of democracy and development in Central America!

Coup in Honduras

It is sad to see the army acting illegally and breaking the Constitutiona order in Latin America again. Yet the reaction of Costa Rica, the OEA and other countries has been impressive and hopefully will reverse this historical regression...