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Rara Avis: Latin American populism in the 21st century

Author

Listed:
  • Luciano Campos

    (Red Nacional de Investigadores en Economía (RedNIE))

  • Agustín Casas

    (Colegio Universitario de Estudios Financieros (CUNEF))

Abstract
At the turn of the century, some new governments in Latin America have been characterized as populist (the so-called new Latin American Left). We focus on the macroeconomic implications of the policies adopted by these governments (instead of their leaders’ rhetoric) and we investigate to what extent this characterization holds. To do so, we identify economic populism with a bivariate vector autoregressive model using real and nominal wages and where populist shocks have no long-run effects on the former variable. The underlying idea of this identification is that populist leaders tend to prioritize income distribution with higher nominal wages disregarding the consistency with the evolution of productivity. Our results indicate that economic populism is not as widespread as previously thought, and that our nuanced approach leads to more informative results. For instance, while we find populism in Argentina, the results for Brazil, Bolivia and Ecuador show only sporadic populist events. In the remaining countries, we do not find persistent economic populism.

Suggested Citation

  • Luciano Campos & Agustín Casas, 2020. "Rara Avis: Latin American populism in the 21st century," Working Papers 13, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:13
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    Cited by:

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    2. Strobl, Martin & Sáenz de Viteri, Andrea & Rode, Martin & Bjørnskov, Christian, 2023. "Populism and inequality: Does reality match the populist rhetoric?," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 1-17.

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    More about this item

    Keywords

    Macroeconomics of populism Income redistribution Structural VARs Long-run restrictions Latin America;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean

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