What caused inflation in Argentina?
Thoughts about this?
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Political dysfunction is always the root cause of things like Argentinian inflation.
The PESO-USD peg which was instituted, ironically, to prevent hyperinflation. This was back in 1991.
For much of the 1990s, the bond market rewarded Argentina with much lower interest rates than their South American neighbours as well as large inflows of foreign capital. However, as Argentinian debt was increasing (this was required to maintain its currency peg), coupled with an overvalued currency (the USD was on a strong swing upwards), the sense of stability and well-being that had prevailed throughout the late 90s was soon brought to a halt. Both in 1998 and 2008, Argentina and Greece respectively were locked in monetary regimes which ruled out the most effective solution for a nation in economic distress: currency devaluation.
(Yes, copy/pasted, but from my own thesis)
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