Nobel Economist Kuznet on 4 Country Types: Why Japan and Argentina? (2019)

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2 points·wslh··4 comments

Argentina was on pace with the US at the beginning of the 20th century [1]. Read to the bottom of that article where it mentions populism and inflation, which tend to go hand-in-hand. When governments don’t control inflation (which are unpopular policies during elections), inflation escalates. The US has targeted 2% inflation since Volcker’s unpopular interest rate policies in the 1970’s [2].

[1] https://www.reuters.com/article/business/chronology-argentin...

[2] https://www.richmondfed.org/publications/research/econ_focus...

There is a common narrative comparing the early 20th-century trajectories of the US and Argentina, but populism and inflation are not the only root causes of Argentina's struggles and the US's success. Another factor, among others, is Argentina's persistent corruption[1] and weakened legal institutions. For instance, corruption and mafia influence in Argentina's ports escalated during the 1930s, and, more broadly, corruption there can be traced back to 1776, even before Argentina's independence.

[1] https://en.wikipedia.org/wiki/Corruption_in_Argentina

Well now Argentina has an economic surplus so that category is not valid anymore. Thanks Milei, you're doing a great job for your fellow citizens!

This is not true, though. The current government is far from fulfilling its campaign promises, at least so far. While inflation has decreased, the country is in a recession and potentially facing a depression. This is not a statement against Milei, but an objective reading of the situation in Argentina.

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