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Understanding the Persistence of Inflation in Argentina: From Peron to Milei

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  • Mario I Blejer

    (Central Bank of Argentina)

Abstract

Argentina's repeated failures to achieve lasting inflation control reflect not merely technical mismanagement, but also the country's deep-seated political and institutional rigidities. Chief among these are the entrenched corporatist structures linking Peronism, organised labour, and the state, which have long constrained productivity and external competitiveness. These structural distortions have created a self-reinforcing inflationary dynamic, undermining stabilisation efforts across successive regimes. Since taking office in 2023, President Milei's administration has achieved notable short-term gains in fiscal balance and inflation reduction, yet recent political uncertainty and foreign exchange interventions highlight persistent vulnerabilities. Without dismantling the political-economic legacy of Peronism and addressing labour market inflexibility, even well-designed reforms risk failure. The current moment may represent Argentina's last opportunity to break its inflationary trap and achieve sustainable macroeconomic stability.

Suggested Citation

  • Mario I Blejer, 2025. "Understanding the Persistence of Inflation in Argentina: From Peron to Milei," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 24(4), pages 5-21.
    • Handle: RePEc:mnb:finrev:v:24:y:2025:i:4:p:5-21
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    File URL: https://hitelintezetiszemle.mnb.hu/sw/static/file/fer-24-4-st1-blejer.pdf
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    References listed on IDEAS

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    1. Emilio Ocampo, 2021. "A Brief History of Hyperinflation in Argentina," CEMA Working Papers: Serie Documentos de Trabajo. 787, Universidad del CEMA.
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      JEL classification:

      • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
      • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
      • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
      • G01 - Financial Economics - - General - - - Financial Crises

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