Economic knowledge at the frontier is not a repository of all past learning. There is important and forgotten knowledge in schools of economic thought that are sometimes neglected by the mainstream.
How does economic theory affect social outcomes? And how can social crises lead to paradigmatic shifts in economic ideas? Professor Matías Vernengo, economics, examines these questions in his three research areas: Keynesian macroeconomics, Latin American economic development and the history of economics, particularly economic growth and development theories and their relation to economic policy.
In his course on Latin American economic development, Vernengo requires students to apply various economic models to explain the historical and institutional causes of Latin America's economic weaknesses compared to developed countries in North America and Western Europe. "Thinking critically about the effects economic policies have on the lives of people and examining the difference alternative economic paradigms could make on the real economy is central to what I ask my students to wrestle with," he explains. "For me, this springs from a passion for the construction of a social science that is in the service of a more civilized society."
Vernengo also teaches a course that applies economic models of the business cycle to explain the historical and institutional causes of the Great Depression and Great Recession. The course aligns with a particular research interest of his: Marriner Eccles, chairman of the Federal Reserve during the Great Depression and World War II. "When I was teaching at the University of Utah, I had access to much of Eccles' original archived material," he says. "It was an excellent opportunity for me to examine firsthand some thinking behind the policies of the time."
When it comes to the history of economics, ideas do not proceed smoothly, says Vernengo, who has served as senior manager of economic research at the Central Bank of Argentina and consulted for the United Nations. "Economic knowledge at the frontier is not a repository of all past learning," he says. "There is important and forgotten knowledge in schools of economic thought that are sometimes neglected by the mainstream. That's why the ideas of Smith, Ricardo, Marx, Kalecki, Keynes and Sraffa are essential for understanding the evolution of capitalism in the developed world and in the periphery."
Posted Sept. 30, 2016