Aggregate Demand and Employment
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Aggregate Demand and Employment

International Perspectives

Edited by Brian K. MacLean, Hassan Bougrine and Louis-Philippe Rochon

With an emphasis on developments during and after the Great Recession, and paying due attention to the impacts of austerity policies, the chapters assembled for this book explain that high growth of aggregate demand is as essential as ever for achieving full employment and rising living standards. Written by distinguished Keynesian and Post-Keynesian economists from diverse national backgrounds, the book tackles critical theoretical and empirical issues to illuminate the economic experiences both of large geographic regions such as Europe, Latin America, and Africa, as well as specific national economies including the USA, Japan, India, and Canada.
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Chapter 5: The failure of development in Latin America

Matías Vernengo


Since the debt crisis in the early 1980s, and the collapse of the state-led industrialization strategy, Latin American economies have been subjected to several adjustment programmes, frequently imposed by the International Monetary Fund (IMF). The economic slowdown and the higher levels of unemployment in this period were only subdued during the short period of the commodity boom between 2003 and the beginning of the Global Financial Crisis in 2008. While there was a short-lived Keynesian moment after the crisis, the return of the balance of payments constraint, and policy choices related to the ascendancy of conventional views on fiscal policy, favouring adjustment and balanced budgets, reasserted their dominance. The growth and employment outlook for the region in the near future looks grim.

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