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Sure, this random guy who works at a foundation who’s mission is “to explain to Argentinians that deficits are bad” [0] is the most qualified person to talk abo

• kragen 4y ago
  You sound like you're being sarcastic, but certainly it sounds like the things he was trying to divulge are some of the most important and fundamental aspects of global economics, and they are aspects that are poorly understood by the Argentine public: producing more is good for everyone, it is bad if the country is in a [trade] deficit, and if we export more it helps us all. (That's my translation of the Spanish.) I don't know anything about his qualifications.
  • RC_ITR 4y ago
    > it is bad if the country is in a [trade] deficit Argentina has been a net exporter since 2019, largely due to dramatically falling imports that are associated with a lower quality of life for its people. Many of Argentina’s problems can be traced directly back to protectionism that is intended to “keep Argentina’s wealth in Argentina” (a great recent example re-nationalizing their oil company by force). This thinking has left the economy extremely dependent on volatile commodities and all but eliminated the vibrant start-up ecosystem that once existed there (Mercado Libre is still the largest public internet company in Latin America). Suffice to say, inflation in Argentina has much more to do with destructive real economy policies than it does with “money printing,” especially when you consider their interest rate has been above 20% since 2016!
    • kragen 4y ago
      It's good if we no longer have a deficit, but I have no illusions that that situation will last; Argentina's perverse anti-protectionist foreign exchange policies that protect foreign companies from Argentine competition are still in place and show no sign of easing. I don't understand why you would call the renationalization of YPF "protectionist". Did it somehow lower YPF's cost of oil drilling, subsidizing Argentina's oil exports, or at least reducing Argentina's oil imports (we are now a net importer)? I would think rather the contrary: by increasing the risk to investors and lenders, it will raise YPF's effective interest rate for the necessary capex, increasing the cost of Argentina's oil exports. What's your reasoning? For reference, "protectionism" refers to government policies that have the effect of increasing the profits of domestic producers by "protecting" them from foreign competition, or political advocacy of such policies. I don't understand what you're saying about "destructive real economy policies" vs. "money printing" and 20% interest rates. Can you elaborate? I would say the Argentine government's policy of printing lots of money is a destructive real-economy policy that has caused interest rates to be very high, because interest rates have to be higher than the rate of inflation in order for lending to be profitable.
• rmbyrro 4y ago
  Do you disagree with what he said? I don't see how the quote diminishes his qualifications to talk about macroeconomics.
  • RC_ITR 4y ago
    I do! I think inflation is usually a real economy problem that has a bad quote about being a monetary phenomenon associated with it (which has confused a generation of lay people). The implication of the economist doesn’t even really make sense - both Argentinas trade and budget deficits aren’t that big vs. the rest of the world, but their inflation and level of government intervention into the real economy sure is. In general, my philosophy on economics is to notice what’s different about a country than just accepting the “easy” answer; a <10% of GDP deficit doesn’t phase me (Major trading partner Brazil is similar in both ways), but a government willing to renationalize a company it sold on the open market sure does!