High Inflation and Stabilization Programs in Argentina during the 1980s: A Classical-Structuralist Interpretation1

ÁLVAREZ RAMIRO EUGENIO

2022-12-01/2023-10-31

1-28

Working paper

Des.Socioecon.y Serv.-Politica y Planif.del

The debates between demand-pull and cost-push theories of inflation have influenced the designing of stabilization programs since 1922 German hyperinflation. In this article, we use a framework that combines elements rooted in the modern revival Classical tradition of value and distribution with the Latin-American Structuralist Approach, to present an analytical reconstruction of the political economy behind the high-inflation regime and the stabilizing policies in Argentina between 1983 to 1989, during Alfonsin?s administration. Our main hypothesis is that, in a small open economy with conflictive claims, external conditions, in general, and the exchange rate, in particular, plays a key role in stabilizing a distributive configuration and price dynamics. In this sense, external debt, persistent expectations of both default and devaluation, and the exchange rate policy imposed by international creditors emerge as the primary causes of the failure of stabilization attempts in Argentina during the 1980s.Este Working paper se ecuentra en evaluación en Review of Political Economy.