El desafio de ser Keynesiano con vacas flacas

The end of convertibility regime and the default closed the access to foreign credit markets to the argentine government. This scenario has reopened de debate on endogenous development, dubbed here “Living with Our Own Resources” (LOOR), that was included in some political discourses in past decades. The first objective of this paper is verifying the anti-cyclical behavior of public revenues, particularly under recessions, as a condition for the sustainability of Keynesian (LOOR) policies. Having found that tax collection performs in a pro-cyclic manner it was proposed here that economic agents use tax evasion as an alternative mechanism of finance. With GDP, tax collection and interest rate data a VAR model was proposed to check whether the Keynesian (LOOR) approach does seem to be feasible