7 ms·

There's an old adage but I'm not sure of the source: "There are four types of economies: developed, undeveloped, Argentina, and Japan."

bananamerica 5y ago
What's the deal with Argentina?
- phlipski 5y ago
  You can't cry for her.
- smnrchrds 5y ago
  The polar opposite of Japan. Japan cannot increase inflation no matter what they do; Argentina cannot decrease it no matter what they do. https://www.economist.com/finance-and-economics/2019/03/28/how-argentina-and-japan-continue-to-confound-macroeconomists https://www.economist.com/finance-and-economics/2019/03/28/h...
  - Jansen312 5y ago
    Japan has too many subsidies and intra-corporations-labour protection. That shielded them at the expense of stagflation.
    - hn_throwaway_99 5y ago
      "stagflation" doesn't describe Japan at all, they're the polar opposite.
    - afterburner 5y ago
      Stagflation means high inflation, high unemployment. Japan does not have high inflation.
      - dustintrex 5y ago
        Or high unemployment for that matter, although reality is less rosy than the headline stats.
  - hervature 5y ago
    I think you meant "Japan cannot increase"
    - smnrchrds 5y ago
      Thanks. Fixed.
    - naniwaduni 5y ago
      "Japan cannot increase" is a surprisingly broadly true statement, even...
      - e12e 5y ago
        It's on a fault line. Japan increases all the time...
  - kobalsky 5y ago
    Just tell japan we could send some politicians over there to fix their issue. Argentina's issue isn't a case study though. On one of the last auctions to print bills there were no bids because they were asking for an insane delivery date. We literally cannot print them fast enough.
  - LudwigNagasena 5y ago
    They can, they just don’t want to.
- vsef 5y ago
  The quote originally is about Japan and Argentina being outliers in development trajectory, Japan extremely rapidly developing after WW2 to one of the world's richest countries vs Argentina's decline from being one of the world's richest countries after WW1. Argentina stands apart in having been initially on similar track as the "developed" rich countries and then significantly deteriorated.
  - chii 5y ago
    Do economists and/or historians agree on what the cause for the decline of argentina's economy was?
- ericol 5y ago
  There's a very interesting comment in this very thread [1] that explain why Japan is different. As an Argentinean, I can tell you that _nobody_ in this country (And, very likely, in the whole world) can explain our inflation. [1] https://news.ycombinator.com/item?id=29313277 https://news.ycombinator.com/item?id=29313277
  - secondaryacct 5y ago
    I can: you expect it, so you create it. Inflation can be psychological: the workers want to resist inflation, the unions block the factories, the factory leaders pressure the politicians, the central bank say now currency divided by 2, salaries expand, prices expand, everything expand, factories restart for another year. Look at how Brazil introduced their last currency, they understood this and had the balls to fix it. They created a virtual currency based on a fixed usd rate, they pretended was just for reference and printed prices in it for salaries, products etc with a floating rate against the normal currency refreshed everyday. People start to wrap their brain around having the shit currency with exploding inflation AND everything priced in a stable, trusted reference point. Then, they rug pulled the old currency and said "now this virtual currency is the real one, here are the banknotes, good luck", and it held because people did not expect that one to inflate all the time. It's simplified but do not imagine nobody understand Argentina's situation: the only ones not understanding are the people there, unwilling to bear the cost of stabilizing and instead forever running away demanding their salaries expand to "resist inflation" when it is the very inflation they try to fight. Each time I hear a little guy in a country saying he expect his x% raise because of inflation (and not, say, results), I know it's a red flag. People should not try to all virtually raise their salary, or what do they expect will happen ? Their salary will change not at all, but the currency will magically be worth less: after all, they did nothing special to deserve more.
    - bedobi 5y ago
      > I can: you expect it, so you create it. Wow! If only you hadn't beaten them to it, countless PhD economists around the world could've gained a Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for this. Now you will get it instead. Dunning Kruger in full effect here!
- hndamien 5y ago
  You can compare the M2 growth rates here and understand why one has crazy inflation and not the other. https://tradingeconomics.com/argentina/money-supply-m2 https://tradingeconomics.com/argentina/money-supply-m2 https://tradingeconomics.com/japan/money-supply-m2 https://tradingeconomics.com/japan/money-supply-m2 Use the compare m2 function and observe the first derivative.
justinzollars 5y ago
I like it!
hcmacro 5y ago
Observed macroeconomic properties are subject to historical path dependence and inextricable from a country's relative technological attainment. As an economic periphery of the Dutch Republic in the 17th century, Japan experienced problems similar to Argentina's. But now, as a "core" economy---no doubt through its special relationship to the US--Japan's role in the global economy is wholly different. The quip above comes from Simons Kuznets and I wrote a book attempting to find an explanation: https://www.google.com/books/edition/The_Tyranny_of_Nations/b5MtEAAAQBAJ?hl=en&gbpv=1&pg=PA78&printsec=frontcover https://www.google.com/books/edition/The_Tyranny_of_Nations/...

bananamerica 5y ago

What's the deal with Argentina?

phlipski 5y ago
You can't cry for her.
smnrchrds 5y ago
The polar opposite of Japan. Japan cannot increase inflation no matter what they do; Argentina cannot decrease it no matter what they do. https://www.economist.com/finance-and-economics/2019/03/28/how-argentina-and-japan-continue-to-confound-macroeconomists https://www.economist.com/finance-and-economics/2019/03/28/h...
- Jansen312 5y ago
  Japan has too many subsidies and intra-corporations-labour protection. That shielded them at the expense of stagflation.
  - hn_throwaway_99 5y ago
    "stagflation" doesn't describe Japan at all, they're the polar opposite.
  - afterburner 5y ago
    Stagflation means high inflation, high unemployment. Japan does not have high inflation.
    - dustintrex 5y ago
      Or high unemployment for that matter, although reality is less rosy than the headline stats.
- hervature 5y ago
  I think you meant "Japan cannot increase"
  - smnrchrds 5y ago
    Thanks. Fixed.
  - naniwaduni 5y ago
    "Japan cannot increase" is a surprisingly broadly true statement, even...
    - e12e 5y ago
      It's on a fault line. Japan increases all the time...
- kobalsky 5y ago
  Just tell japan we could send some politicians over there to fix their issue. Argentina's issue isn't a case study though. On one of the last auctions to print bills there were no bids because they were asking for an insane delivery date. We literally cannot print them fast enough.
- LudwigNagasena 5y ago
  They can, they just don’t want to.
vsef 5y ago
The quote originally is about Japan and Argentina being outliers in development trajectory, Japan extremely rapidly developing after WW2 to one of the world's richest countries vs Argentina's decline from being one of the world's richest countries after WW1. Argentina stands apart in having been initially on similar track as the "developed" rich countries and then significantly deteriorated.
- chii 5y ago
  Do economists and/or historians agree on what the cause for the decline of argentina's economy was?
ericol 5y ago
There's a very interesting comment in this very thread [1] that explain why Japan is different. As an Argentinean, I can tell you that _nobody_ in this country (And, very likely, in the whole world) can explain our inflation. [1] https://news.ycombinator.com/item?id=29313277 https://news.ycombinator.com/item?id=29313277
- secondaryacct 5y ago
  I can: you expect it, so you create it. Inflation can be psychological: the workers want to resist inflation, the unions block the factories, the factory leaders pressure the politicians, the central bank say now currency divided by 2, salaries expand, prices expand, everything expand, factories restart for another year. Look at how Brazil introduced their last currency, they understood this and had the balls to fix it. They created a virtual currency based on a fixed usd rate, they pretended was just for reference and printed prices in it for salaries, products etc with a floating rate against the normal currency refreshed everyday. People start to wrap their brain around having the shit currency with exploding inflation AND everything priced in a stable, trusted reference point. Then, they rug pulled the old currency and said "now this virtual currency is the real one, here are the banknotes, good luck", and it held because people did not expect that one to inflate all the time. It's simplified but do not imagine nobody understand Argentina's situation: the only ones not understanding are the people there, unwilling to bear the cost of stabilizing and instead forever running away demanding their salaries expand to "resist inflation" when it is the very inflation they try to fight. Each time I hear a little guy in a country saying he expect his x% raise because of inflation (and not, say, results), I know it's a red flag. People should not try to all virtually raise their salary, or what do they expect will happen ? Their salary will change not at all, but the currency will magically be worth less: after all, they did nothing special to deserve more.
  - bedobi 5y ago
    > I can: you expect it, so you create it. Wow! If only you hadn't beaten them to it, countless PhD economists around the world could've gained a Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for this. Now you will get it instead. Dunning Kruger in full effect here!
hndamien 5y ago
You can compare the M2 growth rates here and understand why one has crazy inflation and not the other. https://tradingeconomics.com/argentina/money-supply-m2 https://tradingeconomics.com/argentina/money-supply-m2 https://tradingeconomics.com/japan/money-supply-m2 https://tradingeconomics.com/japan/money-supply-m2 Use the compare m2 function and observe the first derivative.

justinzollars 5y ago

I like it!

hcmacro 5y ago

Observed macroeconomic properties are subject to historical path dependence and inextricable from a country's relative technological attainment. As an economic periphery of the Dutch Republic in the 17th century, Japan experienced problems similar to Argentina's. But now, as a "core" economy---no doubt through its special relationship to the US--Japan's role in the global economy is wholly different. The quip above comes from Simons Kuznets and I wrote a book attempting to find an explanation: https://www.google.com/books/edition/The_Tyranny_of_Nations/b5MtEAAAQBAJ?hl=en&gbpv=1&pg=PA78&printsec=frontcover https://www.google.com/books/edition/The_Tyranny_of_Nations/...