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Javier Milei’s Chainsawing Economic Overhaul for Argentina

The anchor is not a sustainable disinflation toolA central contradiction is what Javier Milei, Argentina’s President calls the “anchor approach": using the exchange rate, tariffs, or trade liberalization as the nominal anchor for inflation. How the anchor worksThe idea is: open the economy, allow cheap imports in, and let external competition “discipline” domestic firms.The hope: domestic producers stop raising prices because otherwise they lose market share. That should, in theory,...

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