Argentina’s Use and Abuse of Keynes

Last week, addressing the elite of Argentina’s business community, the economy minister, Axel Kicillof, explained the government's policies as a real-world application of Keynesian theory. But that is a deeply flawed interpretation.

BUENOS AIRES – “We are all Keynesians now,” Republican US President Richard Nixon famously said in 1971. Today, Axel Kicillof, Argentina’s Peronist economy minister, is echoing this sentiment. Is he right?

Kicillof has gained international recognition as the public face of Argentina’s fight against the so-called vulture funds that want to extort full payment on Argentine bonds that they purchased for a few pennies on the dollar. But, before joining President Cristina Fernández de Kirchner’s cabinet, Kicillof was known in Argentine intellectual circles as the author of the book Volver a Keynes (Return to Keynes).

Last week, addressing a gilded ballroom packed with the elite of Argentina’s business community, Kicillof explained the government’s policies as a real-world application of Keynesian theories. In an hour-long speech, he made two key points.

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