Inflation In L.a.

[Noesdeayer]

I am visiting Montevideo this Easter weekend after a long abscence It is impressive to see the changes that have taken place both in the city and in the people themselves.One of the improvements that stands out is the relatively low inflation rate (about 9%) in comparision with Argentina. Uruguayans tell me that even though they may not earn as much as they would like at least they can do some forward planning. In Argentina for most low and middle income people this is fairly difficult if not down right impossible.The main reason being its high inflation rate Inflation at 2% yearly is necessary to move the economy At 6.5 or 9% it begins to be a problem.At Argentina's 38% it as a definite hinderance to forward planning which is a key imperative for any healthy economy either personal or national.Having lived and had a business in Argentina for 36 years.I have experienced first hand how high inflation especially hyper inflation deteriorates not only people's desire for honest work, but also, hampers their desire to innovate and suggest ,or even believe in,change The energy spent in worrying if you'll be able to cover your expenses month after month,year after year,does not leave one with much optimism or faith in their own future,that of their children or of their country..This,naturally,is why so many Argentines continue to vote"with their feet" as they say.They leave.A great many go to the U.S. and Spain. And now some of them are even going to Chile and also to Uruguay.How could that be? Go figure.Inflation is more than an indicator it is a barometer of a healthy economy and a foward looking economy minister and policy.

 

[EdRooney]

These are all good points and I dont think anyone would dispute them. I have yet to hear anyone say that excessive inflation-- such as Argentina's-- is healthy.

 

[RichardP]

What I noticed in Uruguay is that it is expensive. I wonder how the salary of the average Uruguayan fares over there?

 

[RodalfoWalsh]

Devaluation, short term (<5 years) dollar peg, end currency controls, end price controls. In that order.

Then reduce state's participation in the labor market, complete overhaul of the current tax code which is simultaneously stifling, regressive and ineffective, and overhaul social welfare completely.

 

[Noesdeayer]

The basic minimum salary is $15k Uruguayan = U$D 600 or at the blue rate of 12.40 to around AR$ 7.5k .Doctors about $ 20k Uruguayan = U$D 800 = almost AR$ 10K .Engineers at least $40k Uruguayan = U$D 1,600 = AR$ 20k.These are not official.I got them in conversations with everyday people here.They may sound a little low in AR$ but there is llittle "iinflation tax" to worry about.There is great confidence in their country now."Uruguay no se detiene"---"Uruguay's Not Stopping".

 

[EdRooney]

triple post, sorry

 

[EdRooney]

double post, sorry

 

[EdRooney]

Devaluation, short term (<5 years) dollar peg, end currency controls, end price controls. In that order.

Then reduce state's participation in the labor market, complete overhaul of the current tax code which is simultaneously stifling, regressive and ineffective, and overhaul social welfare completely.

What novel ideas. Just coincidentally, Argentina already tried all of those out in the 90s and they led to the greatest economic disaster in its history.

Try again.

 

[thorsten]

You know the difference between correlation and causality Ed?

 

[EdRooney]

OK is it just a coincidence that the same policies are being implemented now in Europe with the same effects?