Peripheral Fluctuations: Notes on the Macroeconomic Analysis of Raúl Prebisch

The work of Prebisch covers a long period of time, during which the configuration of Argentina’s economy as well as the contents and methods of economic theory underwent significant changes. His concern to explore the mechanisms of economic fluctuations in peripheral economies, particularly Argentina, and their analytical implications, is expressed very early and throughout his voluminous work.Apart from the diversity of emphasis and approaches, and the time lag between different pieces of work, several continuities emerge in central aspects of his arguments, particularly with regard to the primacy of external impacts in the economic fluctuations of the periphery, and to the specific processes which operate in these economies in comparison to the economic centers. These arguments motivate Prebisch´s reservations concerning the Keynesian emphasis on inconsistencies between savings and investments as the central determinants of changes in economic activity. This paper deals with the contributions of Prebisch in the macroeconomic field on the basis of a subset of his writings and, in particular, the detailed lecture notes of a course given at University of Buenos Aires in 1944, about monetary theory and policy and business cycle analysis, with special reference to Argentina’s experience. The discussions carried out by Prebisch on those topics show his effort to use abstract reasoning in order to reveal, not to hide, concrete economic processes and, at the same time, it presents arguments relating to particular issues supported by analytical frameworks built upon an understanding and a critique of the current theory. The mix of theoretical reasoning and practical considerations present in the work of Prebisch carries an integration of elements that are rarely found together, and invites the reader to continue to think and to analyze further. The methods, techniques and approaches of economic analysis may have changed, but Prebisch should not be read with an archaeological perspective; his work continues to talk about issues and problems which remain intellectually challenging and relevant in practice.