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A fiscal deficit of 8.5% of GDP, limited access to credit locally and internationally, country risk premiums at default levels and money supply growing at 80% annually, have led some analysts to predict that Argentina might be heading into a "3-digit modern hyperinflation." Although this opinion is not widely held, the consensus inflation forecast for 2021 is 47%, a level significantly below any definition of hyperinflation but high by global standards (above the 98th percentile). Even more worrisome, over the last decade inflation has shown a persistent upward trend and since January 2019 has averaged 45%. Given all of the above, it is worthwhile investigating when Argentina experienced it and why. This paper attempts to answer the first part of this question. According to a widely accepted view there was only one hyperinflation between 1989 and 1990. This paper argues that Argentina experienced four hyperinflationary episodes that were part of a long-term cycle that started in 1945. [ABSTRACT FROM AUTHOR]

Argentina's modern economic history offers perhaps the clearest evidence in support of a rules-based fiscal and monetary policy framework. From 1899 until 1914 the country abided by the rules of the gold standard and experienced rapid GDP growth with price stability. After WWI and until 1939, when it was mostly off the gold standard, its inflation rate and fiscal balances remained in line with those of the world's most developed countries. During the 1930s the Argentine Treasury was able to issue long-term debt in pesos at rates between 3% and 4% per annum. Something fundamental happened after 1945 and its effects proved persistent: since then inflation has averaged 143% a year-with several bouts of extreme inflation and hyperinflation. In the last 50 years, persistent and high fiscal imbalances, low growth and recurrent sovereign debt defaults have become semi-permanent features of the Argentine economy. This paper argues that Argentina suffers from a condition that can be described as fiscal and monetary anomie, the roots of which can be traced back to the establishment of a populist-corporatist economic regime in 1946. It also contends that the failure of the 1990s structural reforms reinforced this condition. [ABSTRACT FROM AUTHOR]

Traditionally GDP had been the indicator used to measure the level of activity, the overall development of society, progress and welfare. But new demands have been emerging in the 21st century and GDP can no longer measure them nor guide policies for their achievement. Unthinkable questions such as "Should governments orient their policies toward growth or toward happiness?" have arisen. With the explicit aim of achieving an indicator that could overcome the above mentioned limitations, the Social Progress Imperative Organization, directed its first efforts towards the elaboration of a Social Progress Index that was expected to be used to "inform and influence policies and institutions all over the world". It has been pointed out that this indicator would be strongly related to the problem of happiness. But more specific indicators of happiness have also been developed and it is argued that they are also adequate measures of social progress. Probably the most recognized is the Gross National Happiness Index published annually since 2012 in the World Happiness Report. These indicators are analyzed in the present paper for recent periods with particular reference to the Argentine case. [ABSTRACT FROM AUTHOR]

In this paper we do a couple of things: discussing a way to measure the welfare cost of country risk, and measuring it for Argentina in the period 1875-2006. There are two conclusions: a) the welfare cost of Argentine risk has been huge: for example, in the period 1976-2006 it was around 20% of GDP, several times larger than the welfare cost of any conventional distortion; b) this cost would be wholly paid by labor. These fascinating results deserve further investigation. [ABSTRACT FROM AUTHOR]

The paper holds that the country risk premium is the triggering factor of the business cycle in a small, financially open and highly volatile economy like that of Argentina. A rise of the premium determines a capital outflow, an aggregate demand contraction and a recession; a fall of the premium determines a capital inflow, an aggregate demand expansion and a boom. We build a model where country risk plays a central role in macroeconomic equilibrium. We evaluate the empirical relationship between country risk and GDP, consumption, investment, and the current account balance. We compare our country-risk model with those of various schools of macroeconomic thought. Main conclusions are: a) Country-risk perceptions of foreign and local investors determine the fraction of world income they like to spend in the small country and the country's GDP adjusts passively to that fraction. b) Country risk causes a sort of labor unemployment that resembles involuntary unemployment. c) Openness softens the impact of a rise in country risk. d) Argentine time series for the period 1985-97 show a strong negative correlation between country risk and those aggregate variables, with causality going from the former to the latter. [ABSTRACT FROM AUTHOR]