Arnold Kling

The Argentina Exception

Arnold Kling, Great Questions of Economics
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Economists who believe that a stable currency and open economy are good for growth have to address the exception of Argentina. Brad DeLong writes,

In the 1990s Argentina implemented perhaps 80% of the neoliberal economic policy agenda. It opened up its economy to world trade and international capital; it sought to guarantee low inflation and sound money. It strove to improve its legal system so that decisions would accord with general rules and foster confidence that contracts would be enforced--whether or not a bribe had been paid.

It failed.

DeLong goes on to provide a plausible analysis that Argentina's failure was in spite of, not because of, its neoliberal policies. Still, it provides a cautionary tale.

Discussion Question. With China growing strongly and Argentina in collapse, are economists' views on free markets misguided?

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