From Centennial to Bicentennial: 100 Years of Lassitude

The Bicentennial celebrations find Argentina in a very peculiar situation. The economy is not in a crisis, but the economic future is highly uncertain. Unlike in 1910, when the Republic commemorated its 100th birthday with pride and optimism for, at the time, it was one of the most promising nations on earth, this time round there is little to cheer about.

Making Fiscal Consolidation Work In Greece, Portugal, and Spain: Some Lessons from Argentina

The Greek crisis has created fears of contagion in other countries of Europe, notably in Portugal and Spain. Unless it is resolved quickly and effectively, the spread will be more severe for it could affect other countries inside and outside of Europe. A growing consensus among international observers is that, despite a massive (€110bn) bailout package from the EU and the IMF in exchange for fiscal austerity measures, public debt restructuring in Greece will not be avoided.

Twin Problems

Argentina faces serious challenges in the two spots where, before, it was thought to have strengths, namely, the fiscal and current account balances. While these challenges were made worse by the current global financial crisis, they were not created by it, but by an inconsistent policy model.

A Sad End to Social Security Privatization in Argentina

As expected, the president of Argentina formally announced yesterday that she would be sending a bill to Congress to re-nationalize the social security system, which was partially privatized in 1993.

Actually, the counter-reform of the pension system has been going on since the beginning of last year. First, the government incorporated 1.3 million new pensioners into the public, pay-as-you-go system (PAYG) via a moratorium that gave workers the right to collect a minimum pension despite not having contributed during most of their active lives.

A New Dawn for Rent Seeking in the Pampas

I think it was Ronald Reagan who once said something along the lines that when business does well, the government taxes it, when it keeps doing well despite the higher taxes, the government regulates it, and when it finally starts to sputter, the government subsidizes it. Nowhere is this truism more, well … true, than […]

Is Argentina a Poor Man’s China?

For the past five years, Argentina has been growing not quite like China, but close. Everything indicates it will do it again this year. There are some folks out there who think that the reason this is happening is because Argentina is following the same model as China. They may be right. Whether this is a […]

The Economics of Real Exchange Rate Management

The intention of my previous blog (“Argentina’s Bogus Miracle,” September 21) was not to imply that the real exchange rate (RER) cannot be managed, but to argue that there are good and bad ways of doing so. Since many people attribute Argentina’s recent growth performance to a deliberate and successful decision to actively depreciate the […]

Argentina’s Bogus Miracle

It is time to debunk the myth that Argentina performed an economic miracle by actively managing the real exchange rate (RER) and to demand the authorities in that country that they implement a serious economic plan before conditions further deteriorate. The myth is that Argentina’s strong post-crisis recovery was due, primarily, to the maintenance of a high and […]