Saturday, March 19, 2005

Argentina Gets the Wrong Idea

Argentina was able to restructure its debt under particularly favorable circumstances, but now it believes it can get away with all sorts of economic mistakes, even the ones that led to its misfortunes during the 1980s. Real interest rates are negative, the government is trying to keep the exchange rate artificially cheap, and in order to control inflation the government is resorting to price controls... this ended in tears the last time around, and I don't see how it won't end in unacceptably high inflation this time around.

The economist has some details

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