tag:blogger.com,1999:blog-8595404115121834255.post8815277835736215356..comments2024-03-28T03:24:05.678-04:00Comments on NAKED KEYNESIANISM: Neoliberalism Resurgent: What to Expect in Argentina after Macri’s Victory*Matias Vernengohttp://www.blogger.com/profile/09521604894748538215noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-8595404115121834255.post-38787973805057122222018-02-09T17:07:47.860-05:002018-02-09T17:07:47.860-05:00Ok. They made their wealth by means of being lawye...Ok. They made their wealth by means of being lawyers and buying loan-defaulted houses that went to auction. Richthofenhttps://www.blogger.com/profile/07619744386273424798noreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-13140260375573807002016-01-29T14:11:22.590-05:002016-01-29T14:11:22.590-05:00SometimesSometimesMatias Vernengohttps://www.blogger.com/profile/09521604894748538215noreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-58156928522895669842015-12-29T20:56:10.487-05:002015-12-29T20:56:10.487-05:00Do you ever come to the New York City area, to lec...Do you ever come to the New York City area, to lecture on these subjects?Ariel Fornarihttps://www.blogger.com/profile/01247514490284896243noreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-60039425460417308762015-12-11T15:53:04.563-05:002015-12-11T15:53:04.563-05:00"Macri is the wealthy scion an Italian immigr..."Macri is the wealthy scion an Italian immigrant family that made its money on the basis of government contracts" ... would it not be relevant to reveal how the Kirchners made theirs for the uninitiated?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-71999722506141449692015-12-10T23:32:06.084-05:002015-12-10T23:32:06.084-05:00Why would the price of soy beans fall after a depr...Why would the price of soy beans fall after a depreciation?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-74801068293970901972015-12-10T06:09:58.771-05:002015-12-10T06:09:58.771-05:00I figure that this can play out one of two ways. O...I figure that this can play out one of two ways. One positive, one negative.<br /><br />(1) The recessionary policies might succeed in squeezing the inflation out of the system ala Thatcher. Much of the Argentine inflation was the result of a wage-price spiral due to the left governments being strongly allied with the trade unions. The right-wingers might manage to stabilise this through recession and a sharp fall in wages. But the measures that they undertake will be extremely unpopular and they will be out of office when the next election comes around. Kirchner can then enter the ring again. But she'll start with a fresh slate on the inflation front and a floating currency that does not require annoying intervention. In this position a heterodox economic policy strategy could prove enormously successful.<br /><br />(2) It doesn't work. The devaluation of the peso leads to a further uptick of inflation but the recession does not prove sufficient to keep wages held down. So, the wage-price spiral goes into high gear. Inflation starts breaking through the 50% mark. This inflation further damages the peso which continues to fall. Who knows where the equilibrium point is here? At some point the government will have to reimpose capital controls. But the whole situation will be a total mess. Their strategy will have failed completely and all they will have achieved is a substantially lowered standard of living for both the rich and poor. The leftists are re-elected but the problems are far worse them before. Argentina remains trapped in the doom loop.<br /><br />I'm indifferent as to which scenario is more likely. Obviously I hope (1) will play out. But I have no idea. All I know is that this government is about to take huge risks. But neither outcome will be positive for their future electoral chances. This will be an interesting one to watch. TheIllusionisthttps://www.blogger.com/profile/17642837989235595346noreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-61663787435968260322015-12-09T18:12:24.010-05:002015-12-09T18:12:24.010-05:00The Brazilian experience, before this self-imposed...The Brazilian experience, before this self-imposed immolation at the altar of austerity, might be the alternative. High interest rates to attract capital flow to allow the black market rate to approach the official one, and in the process accumulate foreign reserves (note that nobody thinks Brazil will default, not even Moody's or Standard & Poor's, even though the current account is large). This could be complemented with a reasonable negotiation with the holdouts, and would make the external situation manageable. Then there is no need for austerity. And the way to promote long term growth would be a combination of public investment (some of it eared to export promotion) and significant import substitution, in particular, to reduce the energy deficit.Matias Vernengohttps://www.blogger.com/profile/09521604894748538215noreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-43701310878066131582015-12-09T17:54:30.357-05:002015-12-09T17:54:30.357-05:00Matias, you make a convincing case on all points. ...Matias, you make a convincing case on all points. In the Argentinian case, I think a large devaluation would have exactly the effects you state. However, I wonder what is the alternative exchange rate policy that you would favor? Do you think Argentina can/should continue to have an unrealistically pegged official exchange rate combined with a "black market"? Or do you think there is a way to re-unify the exchange rates without doing a big devaluation?Anonymoushttps://www.blogger.com/profile/17227786020530000343noreply@blogger.com