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

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  • Esteban Pérez Caldentey
  • Matías 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’s 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’s interests focussed on dynamics and the cycle, themes that were peripheral to Keynes’s central message. Prebisch’s Keynesian influence and his rejection of some aspects of Keynes’s 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 & Matías Vernengo, 2016. "Reading Keynes in Buenos Aires: Prebisch and the Dynamics of Capitalism," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(6), pages 1725-1741.
    • Handle: RePEc:oup:cambje:v:40:y:2016:i:6:p:1725-1741.
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    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

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