With inflation soaring at 113%, Argentina should mothball its central bank and dollarize, top economist Steve Hanke says
Business InsiderAug 07, 2023
The Facts
Argentina's anti-establishment presidential candidate Javier Milei, who emerged as the biggest winner in national primaries last week, met virtually with International Monetary Fund (IMF) officials on Friday to lay out his economic proposals.
He reportedly outlined his plans, including for fiscal deficit reduction, opening up the economy, and introducing a monetary reform to eventually scrap the central bank. He also pitched different models of dollarization.
The Spin
Narrative A
Classical liberalism was the intellectual foundation of Argentina's golden age when Buenos Aires used to rival New York and Paris. Yet, these ideas have been absent from Argentine politics during the disastrous decades-long Peronist era. If the country is to become a world power ever again, the safest bet is, as Milei advocates, to return to its tradition of liberty.
Narrative B
While it's not hard to understand how the eccentric Javier Milei has emerged as Argentina's presidential frontrunner, given the widespread discontent with politics in a country that faces catastrophic inflation, the fact is that his silver bullet to deal with the nation's chronic economic troubles is an unfeasible agenda. As no one really knows how to solve its economic woes, it remains wise to bet against Argentina.
