The notion of rational expectations (RE) as usually understood seeks to encompass two different propositions: (i) perceived law of motion equals actual law of motion: an equivalence between the probability distributions of future outcomes which inform the decisions of agents and the objective distributions which generate those outcomes; (ii) perceived law of motion equals model law of motion: a correspondence of the subjective distributions underlying the choices of agents and the distributions generated by professionally validated models (particularly that which the analyst proposes contemporaneously). Both definitions are quite different unless absolute validity is counterfactually attributed to the provisional and fallible models constructed by economists. A further ambiguity arises with the model-consistent notion since the constructs built by economists have certainly evolved and will continue to change. If an economist imputes current-model-consistent expectations to agents in the past when trying to validate that model, she attributes to those individuals different beliefs from those that the analyst held at the time. These issues condition the logic and significance of large segments of macroeconomic theory. They seem particularly relevant for the study of phenomena like the processes leading to financial crises, where unsustainable patterns of behavior may have once found support in influential bodies of macroanalysis.

AbstractDeep recessions and disruptions in credit markets have caused social concern and motivated research for a long time. They still challenge macroeconomic analysis. We map some observable features of a set of such episodes, trying to find common elements of the whole family of events. The different macroeconomic experiences show a high degree of heterogeneity. Given that, what emerges as a central element of crises is their character as a life-changing episode for the people concerned, which remains in their memory and triggers a search for lessons, as they frustrate past expectations and force widespread reevaluations of wealth and income prospects. Critical periods involve dynamics at different time scales, as economic changes with lasting implications take place in an environment of dramatic day-to-day variability. Crises tend to be associated with breaks in the growth trends of the economies in question, in a way that may surprise not only agents inclined to eccentric behavior, but also those who held beliefs based on prevalent economic analysis. Macroeconomic disturbances of this sort raise strong questions about the pertinence, and the logic, of usual rational expectations assumptions and modeling practices. These issues are briefly discussed in an opening section.

English: The practice of ascribing to agents expectations compatible with the model currently proposed by the analyst has been a widespread feature in Macroeconomics. However, that is a problematic assumption when used to depict anticipations constructed in the past since it would imply attributing to agents the use of a model that the economist had not yet built, and possibly not yet thought about. Thus, model- consistency is an ambiguous notion. In this paper we present a preliminary exploration of the application of the alternative forms of model-consistency in a very standard setup, using two related analytical constructs of different generations for U.S. data for the period 1959-2015.

The macroeconomic crisis of the last decade reopened questions about how economic agents define plans and expectations. The crisis triggered widespread, yet ongoing revisions of the beliefs entertained by agents and economists. The decision errors that result in crises do not necessarily derive from behavioral biases: often, those choices were rationalized with reference to established conventional wisdom, backed by economic theories influential at the respective times. Thus, understanding such socially relevant events requires addressing concretely how people build decision scenarios in changing environments, and how those interact with the evolution of prevalent economic analysis. A revision of Keynes' work on uncertainty, especially his notion of "weight of evidence", can help in this respect. In this paper we analyze some central informational elements of macro crises, discuss weaknesses of the standard analyses which try to accommodate critical phenomena into the rational expectations framework, and comment on ways to move ahead.

espanolEl interes por estudiar con una perspectiva analitica rasgos particulares del desempeno macroeconomico del pais tiene larga historia en la Argentina. En los anos 1960 y 1970, un rico conjunto de trabajos investigo patrones de comportamiento salientes, como las intensas fluctuaciones de actividad y precios asociadas con la variable disponibilidad de divisas (stop-go). En este articulo se vuelve sobre estos temas, en un marco analitico similar al empleado en la literatura tradicional, y poniendo enfasis en las implicancias de las restricciones macroeconomicas de presupuesto. Los resultados permiten precisar condiciones para la validez de efectos como las devaluaciones contractivas. EnglishThe interest in studying specific features of the macroeconomic performance of the country from an analytical perspective has a long history in Argentina. In the 1960s and 1970s a rich body of work investigated salient patterns of economic behavior such as the sharp fluctuations in real activity, inflation and relative prices associated with the varying availability of foreign exchange (stop-go). We revisit such themes, within a framework similar to that employed in the traditional literature, and putting emphasis on the implica­tions of macroeconomic budget constraints. The results inform about conditions for the validity of effects like contractionary devaluations.

Los días 3 y 4 de agosto de 2017 tuvieron lugar las “Sextas Jornadas de Historia de la Industria y los Servicios” en la Facultad de Ciencias Económicas de la Universidad de Buenos Aires (FCE-UBA), organizadas por el Área de Estudios sobre la Industria Argenti-na y Latinoamericana (AESIAL). Reproducimos a continuación las intervenciones de la mesa de cierre de las Jorna-das, dedicadas a la memoria del ingeniero Marcelo Diamand al cumplirse una década de su fallecimiento. La conferencia fue moderada por el Dr. Marcelo Rougier y participaron -en orden de exposición- los Dres. Juan Odisio, Julio César Neffa y Daniel Heymann.

Abstract This paper reviews the IMF DSA (Debt Sustainability Analysis) framework. We first examine the concept of debt sustainability, and argue that the evaluation exercise necessarily entails putting into question market expectations embodied in yield spreads. When the views of the analyst on the capacity of debt repayment differ from the ones reflected in market interest rate premiums, the use of market interest rates for assessing debt sustainability leads to an inconsistency that will in turn bias the assessment. We then show that IMF projections for assessing debt sustainability have been repeatedly biased, which may have contributed to distort the timing of sovereign debt restructurings and the consequent processes of renegotiation. We conclude with a discussion on how the existing DSA framework could be improved.

Los agentes, instrumentos y mecanismos que intervienen en la realización de transacciones cotidianas han ido variando considerablemente a lo largo del tiempo, de acuerdo a la evolución de las prácticas, tecnologías e instituciones que determinan costumbres y mecanismos de pago. La organización de los esquemas de intercambio, y de los sistemas financieros en general se ha convertido en tema saliente de discusión contemporánea. Estas notas presentan un breve análisis de la cuestión, centrado sobre los procedimientos para procesar pagos.

Debt crises have occurred in highly developed countries at the center of the world economy with large and sophisticated financial systems and enormous volumes of transactions in complex instruments. They have equally occurred in peripheral and emerging countries where debt contracts have been plain and simple and the outstanding volume of obligations much smaller in relation to GDP. They have occurred in countries where the domestic standard of denomination of financial contracts entirely dominates and in countries largely relying on foreign currencies. In many cases, they have been preceded by large current account deficits; in others by rough external balance or even a surplus. The build-up to some crises has involved substantial budget deficits, but this has not always been the case — even if in the end the crisis itself may produce fiscal trouble.

This paper studies Bertrand price-setting behavior when firms face capacity constraints (Bertrand–Edgeworth game). This game is known to lack equilibria in pure strategies, while the mixed-strategy equilibria are hard to characterize. We explore families of heuristic rules for individual price-setting behavior and the resulting market patterns, through simulations of agent-based models and laboratory experiments. Overall, the individual pricing strategies observed experimentally can be represented approximately by a sales-based simple rule. In the experiments, average market prices tend to converge from above and approach a state resembling a steady state, with slow aggregate price variations and low price dispersion around an average near the competitive level. However, that configuration can be disturbed occasionally by excursions triggered by discrete price raises of some agents. Salient features of experimental results can be described by simulations where agents use sales-based heuristics with parameters calibrated from the experiments. The results obtained here suggest the existence of useful complementarities between analytical, experimental and agent-based simulation approaches.

Economic crises are associated with large shocks to beliefs and expectations. They put in question the means by which agents and analysts try to understand and forecast the features and the performance of the economy. Thus, the study of crises involves dealing with the practical strategies that economic actors use to interpret and to anticipate the evolution of their environment, and with the fallibility of those procedures. In this setting, we start with a brief review of traditional arguments on the possibilities and limitations of probabilistic approaches in economic contexts. We then discuss some accounts of the recent macroeconomic crisis in central economies, focusing on the problems which arise in predicting the dynamics of non- ergodic systems, characterized by ever- changing patterns of behaviour and where observed regularities may or may not persist. We then concentrate on a salient behavioural aspect of the processes leading to crises, given by the various ways in which agents rationalize an economic path that will eventually be perceived as an unsustainable bubble. We conclude by stressing the relevance of paying attention to the concrete practices of actors in forming representations of the economy and determining expectations.

We study the incentives to expropriate foreign capital under democracy and oligarchy. We model a two-sector small open economy where foreign investment triggers Stolper–Samuelson effects through reducing exporting costs. The incentives to expropriate depend on the distributional effects associated to the investment. How investment affects the incomes of the different groups in society depends on the sectors where these investments are undertaken and on structural features of the economy such as factor intensity, factor substitutability, and price and output elasticities. We characterize the equilibria of the expropriation game and show that if investment is undertaken in the sector that uses labor less intensively then democratic expropriations are more likely to take place. We test this prediction and provide strong evidence of its validity.

Abstract We return to the traditional theme of the distributive consequences of international prices and trade policies, focusing on economies relatively abundant in natural resources with a large non-tradable-goods sector. Changes in international prices create an aggregate demand effect which impacts on the earnings of factors employed in the non-traded goods sector. We show that, in economies highly specialized in the production of tradable goods and where the import-competing sector is small, under standard assumptions, terms-of- trade shifts have a neutral effect on factor prices and thus lack distributive effects, quite differently from Stolper-Samuelson scenarios. In economies with sizable import-competing sectors and two “urban” productive factors (e.g. skilled and unskilled labor), changes in the terms of trade do induce distributional tensions through two channels: (i) the exogenous shift in the relative price of tradable goods, and (ii) the endogenous displacement of the demand for non-tradables. We illustrate how, according to the structure of the economy, different patterns of income distribution may arise. Next, we analyze the introduction of trade duties. Trade taxes change relative prices between tradable goods as a terms-of-trade shock does, but also introduce an additional demand mechanism, that depends on the use the government gives to the revenues. If the tax revenues are transferred back to the private sector, the resulting reallocation of spending favors those factors used intensively in the production of non-tradables.

El trabajo analiza la experiencia macroeconómica post-convertibilidad con énfasis en los movimientos de la inflación y en las políticas y comportamientos asociados. En primer lugar se presenta un esbozo de la evolución macroeconómica en el período, y se discuten rasgos de la interacción entre decisiones públicas y privadas. Se considera luego con más detalle el comportamiento de las políticas monetarias, y se comentan características de las variaciones de precios en el período, especialmente en términos de la magnitud y persistencia de las tasas de inflación y de los patrones de variabilidad de los precios relativos. La sección final contiene una discusión de las disyuntivas involucradas en la elección de las políticas e instituciones macroeconómicas en la Argentina, especialmente aquellas más directamente vinculadas con la regulación del nivel agregado de precios.