How to Approach the Next Steps of the Argentine Economy and the Economic Policy?

In a context of uncertainty, economic policy-making benefits from the availability of “modeled constructions” contributing to the understanding of the economic phenomenon and the possibility of forecasting, even though by themselves they do not determine the decisions to be made by government authorities. The paper called Un modelo económico pequeño para la Argentina (A small economic model for Argentina) is a contribution in this sense. Naturally, such presentations are tributaries, in a cryptic or underlying way, of a substantial vision related to the articulation of the economy and the strategies involved. In this respect, some considerations are worth mentioning, especially when, as clearly stated by Hernán Lacunza in the editorial note of such work, we face “the reality of a developing country”. In this sense, the abovementioned paper, that invokes a basic model and an extended model where more attention is paid to policy alternatives, uses as reference in the first case the “standard” or canonical inflation targeting model that can hardly be the most appropriate for the “reality of a developing country”. On the contrary, the extended model gives an important step forward because it addresses the policy option selected by the BCRA in the last years, which has consisted in the simultaneous intervention in the money and the foreign exchange markets. This approach differs from the standard view and is prone to a pro-development vision. Therefore, there is discrepancy between the basic model and the extended model; the latter appears as «extrinsic» to the former, the one that refers precisely to the basic configuration of the Argentine economy and the highly idiosyncratic policy rules. This will not be harmless at the time of “measuring” the effects of the operation of both models ("more persistency" in the extended model). Alternatively, this note includes, as a sort of heuristic resource, a presentation referred to two models: a basic model and a model more related to policies, characterized by a higher consistency among them and a better affinity with pro-development considerations. And, regarding the operational effects, it allows to compare the persistence phenomena with the hysteresis phenomena, and the guidelines provided by each for economic policy-making differ among themselves. Finally, and to enrich the contribution made by the abovementioned paper (A small economic model for Argentina) with reference to a more pro-development policy, it would be advisable: a) to include the policy option selected by the BCRA in recent years directly in the basic model; and b) to consider the income policy, which is clearly absent in the abovementioned paper.