Argentina’s Problem Is Economic Malpractice, Not the Peso
Dollarization won’t bring much-needed stability to South America’s second-largest economy.
Exchanging one for the other won’t help Argentina’s economy.
Photographer: Sarah Pabst/BloombergJavier Milei, the libertarian candidate for president who has become a political sensation in Argentina, has a characteristically radical proposal for addressing the country’s runaway inflation, which reached almost 110% last month: Argentina should ditch its ever-shrinking peso and replace it with the US dollar.
The proposal may be tempting — and there is the example of Ecuador, which made the dollar legal tender in 2000 and achieved price stability — but the option is neither feasible nor desirable for South America’s second-largest economy. There are far more effective (and, frankly, more straightforward) ways to bring economic stability to Argentina.