Macroeconomic Populism in the 21st Century: Revisiting Dornbusch and Edwards
Dornbusch and Edwards (1990) argued that left-leaning populist leaders in Latin America have a common macroeconomic policy that pursues growth and income distribution, neglecting the adverse effects of deficits and inflation. In their analysis, populist regimes had four economic stages: boom, stagnation, bust, and reform. 21st-century populism lasts longer, and resource extraction is more moderate. We explain this difference through different institutional constraints on the populist leader. Populists constrained by term limits engage in more rapid extractive rent-seeking, leading to more significant economic fluctuations and shorter stages.
The full paper, co-written by Dr. Cachanosky, can be read here.
Nicolás Cachanosky is Ph.D. in Economics from Suffolk University, Master in Economics and Political Sciences from Economía y Ciencias Políticas ESEADE and Bachelor in Economics from the Catholic University of Argentina (UCA). He is Associate Professor of Economics of the Metropolitan State University of Denver (MSU Denver). He is Senior Fellow of the American Institute for Economic Research (AIER) in the Sound Money Project. He is author of Monetary Equilibrium and Nominal Income Targeting (2018, Routledge) and co-author together with Peter Lewin of Austrian Capital Theory: A Survey of the Essentials (2019, Cambridge University Press) and Capital and Finance: Theory and History (2020, Routledge). His academic papers have been published in journals such as Journal of the History of Economic Thought, Review of Financial Economics, Quarterly Review of Economics and Finance, Journal of Institutional Economics, Public Choice, Journal of Economic Behavior and Organization, Southern Economic Journal, and The Review of Austrian Economics, among others. He is currently President of the Association of Private Enterprise Education, serves in the Board of Directors of the Mont Pelerin Society and is member of the Academic Committee of the Acton Argentina Institute. He is editor of the Journal LIBERTAS: Segunda Época and is member of the editorial board of The Review of Austrian Economics and The Economists' Voice. He publishes columns in various Argentine media, such as La Nación, Infobae, El Cronista, Perfil and Ambito.