Tuesday, December 4, 2012

How do you measure economic success?

So the piece on Argentina at the Guardian got a lot of comments. One suggested that Argentina has not been very succesful. As I pointed out in terms of growth (if you use Levy-Yeyati's numbers, as shown in the figure below; his series is the red line) the average rate of growth has been at slightly more than 6% per year since the default, which constitutes the highest rate in the country's history.
Further, if one looks at the expansion of real wages in the industrial sector (using Ferreres numbers; there is a 2nd edition with more recent data) you have an impressive increase of 8.9% per year since the default (up to 2009; they also grew in 2010 and 2011, even though it is less clear they will in 2012).

Sure real wages are still below the peaks (mid-1950s, early 1970s and the very short lived increase after the Austral Plan in the mid-1980s), but the recovery is impressive nonetheless. So the country grows and workers are doing better. I don't know what you think, but it looks pretty good to me.

PS: Levy-Yeyati and Ferreres' numbers (not the official) are the ones used by the critics to say that the boom was not a success.

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