Rara Avis: Latin American populism in the 21st century

Luciano Campos () and Agustin Casas ()

No 4322, Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política

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.

Keywords: Macroeconomics of populism; Income redistribution; Structural VARs; Longrun restrictions; Latin America (search for similar items in EconPapers)
JEL-codes: C32 E64 H11 N36 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2020-11
New Economics Papers: this item is included in nep-mac
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Related works:
Journal Article: Rara Avis: Latin American populism in the 21st century (2021)
Working Paper: Rara Avis: Latin American populism in the 21st century (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:aep:anales:4322

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