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Analyzing recent price anomalies in Argentina: Global influences and domestic distortions

Author

Listed:
  • Emiliano Basco

    (Central Bank of Argentina)

  • Emilio Blanco

    (Central Bank of Argentina)

  • Luis Libonatti

    (Central Bank of Argentina)

  • Ignacio López Gaffney

    (Yale University)

Abstract

This study investigates Argentina’s unusually high and persistent goods inflation in the af-termath of the COVID-19 pandemic, using a cross-country monthly panel and a model thatdecomposes inflation into observable marginal costs, global price pass-through, and changingmarkups. We find that, at their peak in January 2024, goods price markups were approx-imately40%higher than in November 2011. Further analysis indicates that these elevatedmarkups were primarily driven by distortionary policy interventions—particularly foreign ex-change controls, non-tariff barriers, and complex import regulations—which disrupted marketpricing mechanisms and significantly amplified inflation, positioning Argentina as a clear out-lier in the global inflation cycle.

Suggested Citation

  • Emiliano Basco & Emilio Blanco & Luis Libonatti & Ignacio López Gaffney, 2025. "Analyzing recent price anomalies in Argentina: Global influences and domestic distortions," BCRA Working Paper Series 2025118, Central Bank of Argentina, Economic Research Department.
    • Handle: RePEc:bcr:wpaper:2025118
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    File URL: https://www.investigacioneseconomicas.bcra.gob.ar/documentos_de_trabajo/article/view/698/577
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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