Pub Date : 2021-08-12DOI: 10.1080/08911916.2021.1945249
Abstract
This is a rejoinder to the stimulating comments by David Colander, Drucilla Barker and Jeronim Capaldo on my critique of the non-progressive macroeconomic DSGE research paradigm. The three comments expand my arguments and underscore the need for a drastic change in the mainstream approach to macroeconomics.
{"title":"A Rejoinder","authors":"","doi":"10.1080/08911916.2021.1945249","DOIUrl":"https://doi.org/10.1080/08911916.2021.1945249","url":null,"abstract":"<p><b>Abstract</b></p><p>This is a rejoinder to the stimulating comments by David Colander, Drucilla Barker and Jeronim Capaldo on my critique of the non-progressive macroeconomic DSGE research paradigm. The three comments expand my arguments and underscore the need for a drastic change in the mainstream approach to macroeconomics.</p>","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"42 1","pages":""},"PeriodicalIF":1.2,"publicationDate":"2021-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138540368","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-03DOI: 10.1080/08911916.2021.1984730
Jesus Ferreiro, F. Serrano
Abstract This paper explains the economic policy developed in the euro area to manage the economic effects induced by the COVID health crisis. First, an overview of developments in the euro area is presented. It then explains the fiscal decisions taken by member countries, as well as the monetary policy pursued by the European Central Bank. The final part reflects on the advisability of abandoning the fiscal rules that limit the fiscal capacity of states in order to favor economic recovery once the health crisis has been overcome.
{"title":"The COVID Health Crisis and the Fiscal and Monetary Policies in the Euro Area","authors":"Jesus Ferreiro, F. Serrano","doi":"10.1080/08911916.2021.1984730","DOIUrl":"https://doi.org/10.1080/08911916.2021.1984730","url":null,"abstract":"Abstract This paper explains the economic policy developed in the euro area to manage the economic effects induced by the COVID health crisis. First, an overview of developments in the euro area is presented. It then explains the fiscal decisions taken by member countries, as well as the monetary policy pursued by the European Central Bank. The final part reflects on the advisability of abandoning the fiscal rules that limit the fiscal capacity of states in order to favor economic recovery once the health crisis has been overcome.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"212 - 225"},"PeriodicalIF":1.2,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48268078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-03DOI: 10.1080/08911916.2021.1984729
G. Dymski
Abstract This paper explores the interlinkages among several trends that have accelerated in the years since the Great Financial Crisis (GFC): the inability of governments in open emerging-market economies to sustain countercyclical policies; central banks’ measures to ensure the stability of hyper-leveraged global financial markets; rising inequality within and between nations; nativist fervor and a search for political scapegoats among voting publics; and enhanced global economic control by unaccountable corporate elites. We “connect the dots” between global power-plays and national and local stratification processes by following the trajectory of six papers that Eugenia Correa authored or coauthored between 2012 and 2020 in English-language journals.
{"title":"Intersectional Inequality and Global Economic Power: Self-Feeding Dynamics Within and Across National Borders","authors":"G. Dymski","doi":"10.1080/08911916.2021.1984729","DOIUrl":"https://doi.org/10.1080/08911916.2021.1984729","url":null,"abstract":"Abstract This paper explores the interlinkages among several trends that have accelerated in the years since the Great Financial Crisis (GFC): the inability of governments in open emerging-market economies to sustain countercyclical policies; central banks’ measures to ensure the stability of hyper-leveraged global financial markets; rising inequality within and between nations; nativist fervor and a search for political scapegoats among voting publics; and enhanced global economic control by unaccountable corporate elites. We “connect the dots” between global power-plays and national and local stratification processes by following the trajectory of six papers that Eugenia Correa authored or coauthored between 2012 and 2020 in English-language journals.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"189 - 197"},"PeriodicalIF":1.2,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49252224","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-03DOI: 10.1080/08911916.2021.1984943
Alicia Girón, M. Seccareccia
Abstract The purpose of this introductory piece is to offer readers an understanding of Eugenia Correa, who was one of Mexico’s foremost heterodox economists, and her important ideas. In the article, we describe our professional association with her for over 30 years and identify some common research agendas that were pursued over this long period. We also highlight some key elements of Eugenia Correa’s economic thought and why some of her ideas from the 1990s prove to be prescient since they are so appropriate to understanding our times.
{"title":"Remembering Eugenia Correa and Her Vision for the Future: Introduction","authors":"Alicia Girón, M. Seccareccia","doi":"10.1080/08911916.2021.1984943","DOIUrl":"https://doi.org/10.1080/08911916.2021.1984943","url":null,"abstract":"Abstract The purpose of this introductory piece is to offer readers an understanding of Eugenia Correa, who was one of Mexico’s foremost heterodox economists, and her important ideas. In the article, we describe our professional association with her for over 30 years and identify some common research agendas that were pursued over this long period. We also highlight some key elements of Eugenia Correa’s economic thought and why some of her ideas from the 1990s prove to be prescient since they are so appropriate to understanding our times.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"183 - 188"},"PeriodicalIF":1.2,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48711581","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-03DOI: 10.1080/08911916.2021.1984728
Andrés Arauz
Abstract Rich countries’ central bank digital currencies (CBDCs) and Facebook’s stablecoin constitute risks to developing countries. Foreign CBDCs risk facilitation of capital flight. Novi, Facebook’s wallet for WhatsApp risks countries’ domestic payment systems moving offshore. This article presents the analytical framework for assessing these risks by analyzing payment system dynamics in the framework of the theory of the monetary circuit applied to the international hierarchy of money. It quantifies the US and dollarized Ecuador’s pyramid of liabilities to demonstrate the impact of payment systems on the potential of banks’ money creation. While a domestic CBDC or a potent bank-money payment system can help to increase significantly the potential of money creation in a dollarized economy, the offshoring of domestic payment systems by substituting local currencies with foreign stablecoins such as Facebook’s Diem and its Novi wallet reduces the potential of money creation. It strongly encourages countries low in the hierarchy of money to engage in a diverse set of regulations to mitigate these risks preemptively and proactively regulate to promote a dynamic payment system without the risk of currency substitution.
{"title":"The International Hierarchy of Money in Cross-Border Payment Systems: Developing Countries’ Regulation for Central Bank Digital Currencies and Facebook’s Stablecoin","authors":"Andrés Arauz","doi":"10.1080/08911916.2021.1984728","DOIUrl":"https://doi.org/10.1080/08911916.2021.1984728","url":null,"abstract":"Abstract Rich countries’ central bank digital currencies (CBDCs) and Facebook’s stablecoin constitute risks to developing countries. Foreign CBDCs risk facilitation of capital flight. Novi, Facebook’s wallet for WhatsApp risks countries’ domestic payment systems moving offshore. This article presents the analytical framework for assessing these risks by analyzing payment system dynamics in the framework of the theory of the monetary circuit applied to the international hierarchy of money. It quantifies the US and dollarized Ecuador’s pyramid of liabilities to demonstrate the impact of payment systems on the potential of banks’ money creation. While a domestic CBDC or a potent bank-money payment system can help to increase significantly the potential of money creation in a dollarized economy, the offshoring of domestic payment systems by substituting local currencies with foreign stablecoins such as Facebook’s Diem and its Novi wallet reduces the potential of money creation. It strongly encourages countries low in the hierarchy of money to engage in a diverse set of regulations to mitigate these risks preemptively and proactively regulate to promote a dynamic payment system without the risk of currency substitution.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"226 - 243"},"PeriodicalIF":1.2,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46090941","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-03DOI: 10.1080/08911916.2021.1984968
Marcia Solorza
Abstract The COVID-19 pandemic has made it evident that the deep global economic-financial crisis of 2007–2009 has not been overcome. Instability and uncertainty have reached extreme levels in all public and private spheres, demanding to revolutionize the economic structure, promote innovation in methods to manage production, generate originality in the social and institutional organization of the State and to accelerate the advent of new energy sources to promote in unprecedented ways the relationship between human beings and nature. In recent years and during the pandemic, in Latin American economies, unemployment, underemployment and informal employment, public debt, and inflation rates have increased, while the real income of governments fell. This situation is accompanied by persistent operating account deficits, public and private debt negotiations, high interest rates, periods of stability or appreciation in the exchange rate, volatility of foreign capital flows and flight of national capital; all being favorable elements for the mainstream policy based on fiscal discipline. In a post-pandemic stage, during which income concentration accelerates and the prices of basic necessities such as food and medicines increase, the planned government deficit, taking into account the heterogeneity among countries in the region, could avoid another lost decade with a multiplier effect on socio-economic development.
{"title":"Responsible Fiscal Policy and Economic Development: A Challenge for Latin America After COVID-19","authors":"Marcia Solorza","doi":"10.1080/08911916.2021.1984968","DOIUrl":"https://doi.org/10.1080/08911916.2021.1984968","url":null,"abstract":"Abstract The COVID-19 pandemic has made it evident that the deep global economic-financial crisis of 2007–2009 has not been overcome. Instability and uncertainty have reached extreme levels in all public and private spheres, demanding to revolutionize the economic structure, promote innovation in methods to manage production, generate originality in the social and institutional organization of the State and to accelerate the advent of new energy sources to promote in unprecedented ways the relationship between human beings and nature. In recent years and during the pandemic, in Latin American economies, unemployment, underemployment and informal employment, public debt, and inflation rates have increased, while the real income of governments fell. This situation is accompanied by persistent operating account deficits, public and private debt negotiations, high interest rates, periods of stability or appreciation in the exchange rate, volatility of foreign capital flows and flight of national capital; all being favorable elements for the mainstream policy based on fiscal discipline. In a post-pandemic stage, during which income concentration accelerates and the prices of basic necessities such as food and medicines increase, the planned government deficit, taking into account the heterogeneity among countries in the region, could avoid another lost decade with a multiplier effect on socio-economic development.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"198 - 211"},"PeriodicalIF":1.2,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43757714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-07-03DOI: 10.1080/08911916.2021.1984977
A. Vanoli
Abstract This article analyzes the economic and social impact of the pandemic in Argentina. It begins with the macroeconomic crisis that the new government had to face in December 2019 and the degrees of freedom available to be able to carry out compensatory fiscal and monetary policies to alleviate the effects of the pandemic. The article also analyzes the impact of these compensatory measures, their limits and results. In particular, it reviews the global impact of the pandemic, the different types of response at the international level and the asymmetry of the global recovery, in addition to evaluating different scenarios and their impact in Argentina and other developing countries. Finally, it also studies the temporary and permanent changes that the pandemic causes at the global level and suggests policy alternatives to avoid external restriction to face the crisis. It does so by laying the foundations for equitable development on the philosophical basis of Latin American structuralism and progressive thought, all within a new paradigmatic framework.
{"title":"The Economy Between Pandemics","authors":"A. Vanoli","doi":"10.1080/08911916.2021.1984977","DOIUrl":"https://doi.org/10.1080/08911916.2021.1984977","url":null,"abstract":"Abstract This article analyzes the economic and social impact of the pandemic in Argentina. It begins with the macroeconomic crisis that the new government had to face in December 2019 and the degrees of freedom available to be able to carry out compensatory fiscal and monetary policies to alleviate the effects of the pandemic. The article also analyzes the impact of these compensatory measures, their limits and results. In particular, it reviews the global impact of the pandemic, the different types of response at the international level and the asymmetry of the global recovery, in addition to evaluating different scenarios and their impact in Argentina and other developing countries. Finally, it also studies the temporary and permanent changes that the pandemic causes at the global level and suggests policy alternatives to avoid external restriction to face the crisis. It does so by laying the foundations for equitable development on the philosophical basis of Latin American structuralism and progressive thought, all within a new paradigmatic framework.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"244 - 256"},"PeriodicalIF":1.2,"publicationDate":"2021-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45711058","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-03DOI: 10.1080/08911916.2021.1945231
Orsola Costantini
The COVID-19 pandemic has brought about a shift in the policy discourse and, in many cases, in policy measures, with the reappearance of concepts previously taboo, such as industrial policy, in the legitimate toolkit of “respectable” governments. Economic experts, as well as international organizations, who had for a long-time demonized deficit spending and public debt growth flipped their views suddenly, maintaining that – as long as markets allow it – expansionary fiscal and monetary policies should continue beyond the early signs of economic recovery. But if that about-face was sometimes accompanied by a mea culpa for too quick a return to fiscal consolidation in 2010, these experts never came to question the theoretical framework on which the previous arguments were based. “It’s the ‘facts’ that change, the theory remains correct.” In times of crisis, even economists who normally care for methodological distinctions are tempted to ignore or downplay them to build alliances to support long-sought-for policies. As David Colander (2021, 99) argues in his comments, “strategic considerations” may suggest that this kind of compromising attitude is, in fact, what can lead to progressive/incremental change in the discipline. On the other hand, there are others who may think that it is precisely when contradictions in the dominant narrative emerge more clearly that we should present theories in their “purest form” (Lerner 1943), by highlighting methodological distinctions and their implications for the democratic debate. Failure to do so may produce only a fragile and superficial shift, bound to subside with a change in political winds. Economics would then remain the language of power, rather than be an instrument of knowledge and emancipation. From this latter point of view, Professor Storm’s rebuttal of Dynamic Stochastic General Equilibrium (DSGE) models comes at an appropriate time (Storm 2021a). It provides ten logically impeccable and inescapable reasons why those endemic models simply are not equipped, and irremediably so, to capture and interpret critical features of reality: new, old and future facts included. Even when they allow for ad hoc adjustments that may favor particular policy preferences at specific junctures – something in itself problematic – their fundamental limitations are constraining and detrimental to policy discussion. They should be discarded definitively. And yet, even today, the impact of policy packages defined “historical” and “game-changing” continue to be assessed officially by means of these same old models (DSGE and CGE), as illustrated, with examples, by Jeronim Capaldo (2021, 107–110) in this symposium. As Servaas Storm reminds us, macroeconomics has been in an existential crisis for at least 10 years. Overcoming it requires a radical approach. This does not mean pursuing a paradigmatic “power overturn” in economics, whereby one currently heterodox approach becomes dominant over all others. Truly revolutionary i
{"title":"Guest Editor’s Note","authors":"Orsola Costantini","doi":"10.1080/08911916.2021.1945231","DOIUrl":"https://doi.org/10.1080/08911916.2021.1945231","url":null,"abstract":"The COVID-19 pandemic has brought about a shift in the policy discourse and, in many cases, in policy measures, with the reappearance of concepts previously taboo, such as industrial policy, in the legitimate toolkit of “respectable” governments. Economic experts, as well as international organizations, who had for a long-time demonized deficit spending and public debt growth flipped their views suddenly, maintaining that – as long as markets allow it – expansionary fiscal and monetary policies should continue beyond the early signs of economic recovery. But if that about-face was sometimes accompanied by a mea culpa for too quick a return to fiscal consolidation in 2010, these experts never came to question the theoretical framework on which the previous arguments were based. “It’s the ‘facts’ that change, the theory remains correct.” In times of crisis, even economists who normally care for methodological distinctions are tempted to ignore or downplay them to build alliances to support long-sought-for policies. As David Colander (2021, 99) argues in his comments, “strategic considerations” may suggest that this kind of compromising attitude is, in fact, what can lead to progressive/incremental change in the discipline. On the other hand, there are others who may think that it is precisely when contradictions in the dominant narrative emerge more clearly that we should present theories in their “purest form” (Lerner 1943), by highlighting methodological distinctions and their implications for the democratic debate. Failure to do so may produce only a fragile and superficial shift, bound to subside with a change in political winds. Economics would then remain the language of power, rather than be an instrument of knowledge and emancipation. From this latter point of view, Professor Storm’s rebuttal of Dynamic Stochastic General Equilibrium (DSGE) models comes at an appropriate time (Storm 2021a). It provides ten logically impeccable and inescapable reasons why those endemic models simply are not equipped, and irremediably so, to capture and interpret critical features of reality: new, old and future facts included. Even when they allow for ad hoc adjustments that may favor particular policy preferences at specific junctures – something in itself problematic – their fundamental limitations are constraining and detrimental to policy discussion. They should be discarded definitively. And yet, even today, the impact of policy packages defined “historical” and “game-changing” continue to be assessed officially by means of these same old models (DSGE and CGE), as illustrated, with examples, by Jeronim Capaldo (2021, 107–110) in this symposium. As Servaas Storm reminds us, macroeconomics has been in an existential crisis for at least 10 years. Overcoming it requires a radical approach. This does not mean pursuing a paradigmatic “power overturn” in economics, whereby one currently heterodox approach becomes dominant over all others. Truly revolutionary i","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"75 - 76"},"PeriodicalIF":1.2,"publicationDate":"2021-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47694242","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-03DOI: 10.1080/08911916.2021.1944591
Drucilla K. Barker
Abstract Servaas Storm is correct in his assertion that currently macroeconomics needs fixing, and in his analyses, he shows that a renewed reliance on dynamic, stochastic general equilibrium (DSGE) models will only make matters worse. I argue that in addition they are unable to address the crises of care and social reproduction, because the macroeconomic aspects of these crises are tied to the problems of unemployment, poverty, and inequality. DSGE models lack empirical adequacy, elevate mathematical complexity and consistency above all other scientific values, and leave economics in the hands of elite cadre of economists.
{"title":"A Feminist Economist Joins the Conversation","authors":"Drucilla K. Barker","doi":"10.1080/08911916.2021.1944591","DOIUrl":"https://doi.org/10.1080/08911916.2021.1944591","url":null,"abstract":"Abstract Servaas Storm is correct in his assertion that currently macroeconomics needs fixing, and in his analyses, he shows that a renewed reliance on dynamic, stochastic general equilibrium (DSGE) models will only make matters worse. I argue that in addition they are unable to address the crises of care and social reproduction, because the macroeconomic aspects of these crises are tied to the problems of unemployment, poverty, and inequality. DSGE models lack empirical adequacy, elevate mathematical complexity and consistency above all other scientific values, and leave economics in the hands of elite cadre of economists.","PeriodicalId":44784,"journal":{"name":"INTERNATIONAL JOURNAL OF POLITICAL ECONOMY","volume":"50 1","pages":"103 - 106"},"PeriodicalIF":1.2,"publicationDate":"2021-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46998671","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-03DOI: 10.1080/08911916.2021.1936910
K. Kiper
Abstract In this study, the pricing behavior of Turkish manufacturing is analyzed using panel data on 22 sub-sectors for the period from 2004 to 2015. The empirical findings of the study largely support the post-Keynesian hypothesis, in that the monopolistic power and non-wage costs of the sectors have a strong relationship with prices. However, one notable finding is that contrary to theoretical expectations, a statistically significant relationship between industrial prices and wage costs could not be determined. This finding implies that labor is not a serious cost element and can be interpreted as reflecting the pressure and flexibility policies established on labor when the neoliberal transformation is gaining momentum. Further, strong statistical evidence supports the validity of markup pricing in the oligopolistic sectors, which appears to have declined after the global financial crisis. Finally, the results indicate that increasing foreign trade openness in those industries with a production structure that is dependent on imported input factors does not appear to discipline markets by suppressing markup rates.
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