Acerca de Nicolas Cachanosky

Associate Professor of Economics | Metropolitan State University of Denver

AIER: With Argentina in Default, Economists Call for Good Faith Negotiations

Argentina has defaulted on its sovereign debt again. And the government is currently going through difficult negotiations with its creditors. Joseph Stiglitz, Edmund Phelps, and Carmen Reinhart, along with many reputable economist co-signers, have asked creditors to negotiate in “good faith.” What they are really asking, however, is for creditors to accept the offer Argentina puts on the table. 

To date, Argentina has refused to share any cost of the default and asked creditors to wait until the next government takes office for bond payments to resume. That is an unreasonable ask.

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AIER: The Grim Future of Latin America After the Pandemic Outbreak

As hard as the economic restrictions are in the U.S. due to the pandemic outbreak, other countries are facing even more severe measures. While the U.S. has issued stay-at-home orders, for example, other countries have opted for more extreme quarantines. Want to go for a short walk to stretch your legs, get some vitamin D, and some fresh air? Better head to the grocery store. Otherwise, you may find yourself with a big fine–or, even worse, in jail. In some cities you need a special permit to walk the streets.

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Infobae: Crisis de deuda (volviendo a la realidad)

Una vez más Argentina se enfrenta a un potencial default de la deuda soberana. Joseph E. Stiglitz, Edmund S. Phelps y Carmen M. Reinhart hicieron un pedido público de “buena fe” a los acreedores internacionales. Su pedido fue acompañado por un grupo de reconocidos economistas a nivel internacional. El acto de buena fe consiste, por supuesto, en aceptar la oferta de Martín Guzmán. A diferencia de quienes piden “buena fe”, los tenedores de bonos no han perdido contacto con la realidad y son conscientes del tipo de deudor que tienen enfrente.

Es importante recordar que la crisis de deuda no se debe a la pandemia del Covid-19. El actual gobierno presentó al ministro Guzmán como un experto en deuda soberana con el objetivo principal de reestructurar la deuda Argentina. Modestia aparte, nos decían que Guzmán iba a dar una lección al mundo sobre cómo llevar adelante una reestructuración de deuda soberana. Es cierto que la actual pandemia ha complicado el escenario, lo que no es cierto es que la crisis de deuda se debe al coronavirus. Es importante ser realista con la situación de la economía del país para llegar a un buen acuerdo con los acreedores y dar una solución definitiva a los crónicos problemas de deuda que enfrenta el país.

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WP: Hermeneutics and Phenomenology in the Social Sciences: Lessons from the Austrian School of Economics Case

Latest work with Gabriel Zanotti and Agustina Borella. In this occasion we explore the recent hermeneutics episode in the Austrian School of economics. Implications that transcend this school of thought.

We study a case that applies hermeneutics to social sciences, in particular to the Austrian school of economics. We argue that an inaccurate treatment of hermeneutics contributed to an epistemological downgrade of the Austrian school in the economic scientific community. We discuss how this shortcoming can be fixed and how a proper hermeneutic application to the Austrian school explains why this school of thought is neither positivist nor postmodern.

Download the paper from SSRN.

AIER: To Avoid Permanent Leviathan, People Must Reclaim their Rights

A recent article in The Economist raises an important issue with respect to the coronavirus outbreak. A big government may well be needed to fight the pandemic, but how will it shrink back once the pandemic crisis is over? “The state must act decisively. But history suggests that after crises the state does not give up all the ground it has taken.”

In Crisis and Leviathan, Robert Higgs explains how crisis after crisis, the U.S. government increases in either size or regulatory reach. When a crisis occurs, there is a demand for the government to “do something.” Responding to this demand, governments increase their size and regulatory outreach. However, once the crisis is over, spending and regulation do not go back to their initial levels. The result is an increase in government size and regulatory reach from one crisis to the next.

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WP: Rediscovering Buchanan’s Rediscovery

Se cumplen 100 años del nacimiento de James M. Buchanan. Public Choice esta editando un número especial por dicha ocasión. Una gran satisfacción ser parte de ese número con un paper escrito junto a Edward J. Lopez (Western Carolina University).

While Buchanan is best known for the economics of politics and constitutions, his seminal contributions to this field are but one branch of his more underlying methodology and approach to doing social science. Buchanan’s fundamental project was to re-orient economics and social science toward an analysis of symbiotic exchange (catallactics) rather than of antiseptic allocation (optimization). The most definite statement of this contribution lies in Buchanan’s 1963 presidential address to the Southern Economic Association, “What Should Economists Do?” which was later expanded into a book of the same title. This paper seeks to draw attention to several of Buchanan’s more recent but lesser known articles where he fully develops this theme. He calls on economists to rediscover Adam Smith’s “elementary notion” about the division of labor and the extent of the market, and he professes the notion of “generalized increasing returns” as a mechanism for economists to rediscover their Scottish Enlightenment roots within the neoclassical framework. In this same vein, we also discuss how Buchanan’s rediscovery might apply to two prominent and ongoing twenty-first century issues, trade restrictions and populism.

Acceder al paper en SSRN.

Infobae: 10 reformas para evitar una nueva Gran Depresión

La Gran Depresión de la década del 30 fue la peor crisis económica del siglo XX, con una tasa de desempleo llegando al 25%. Los impactos sociales y económicos de la Gran Depresión persisten hoy día. Una preocupación, entendible, es si la pandemia puede derivar en una Gran Depresión.

Sin embargo, la historia nos enseña que ese no tiene por qué ser el caso. Se estima que la pandemia de gripe española de 1918 produjo una caída en actividad económica del 25% entre julio de 1918 y marzo de 1919. Caída similar a los primeros cuatro años de la Gran Depresión. Es decir, la gripe española produjo una caída en actividad cuatro veces más rápida que la crisis del 30. Sin embargo, la economía española se recuperó rápidamente, creciendo alrededor de un 25% entre marzo de 1919 y enero de 1920.

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