The Economist Guillermo Calvo said neither bimonetarism nor dollarization are viable for the economic future of Argentina. In this context, he stated that you must find “a way to support the weight”.
Calvo made these statements at the opening of the Annual Conference of the Latin American Economic Research Foundation (FAITHFUL) that took place in the Buenos Aires Stock Exchange.
In this sense, he made it clear that “Financial crises are very complexespecially for the Government, because They are not solved simply by lowering or raising the interest rateor things similar.”
Calvo, who served in the past as IDB chief economistmaintained that It is essential to “know very well the micro associated with the macro”since “political power groups take advantage of these crises to get the best out of it.”
In this context, your advice for the future “is do fire drills with the central bank and the treasure for be prepared as best as possible for criseswhich could be coordinated through a committee of economic advisors.”
He also urged “pay attention to the type of shock that may cometake it calmly and with unity”, in regards to the short term.
What did Calvo say about bimonetarism and dollarization in Argentina?
The prestigious academic expressed his fear because a possible bimonetary scenario “produce a strong run against the weight and reduce the inflation tax collection“.
“I define bimonetarism like a situation in which the peso and the dollar have transactional liquidityand it seems to me that this is not the case in Argentina yet,” he said.
According to the dollarization of the economy, a proposal promoted by the presidential candidate for Freedom Advances, Javier Mileidescribed it as a “very high risk substitute”.
“Let’s find a way to support the weight and let us not fall into the trap of the antichrist. You have to create something that gives people confidence. because Argentina is totally off the map,” concluded the Columbia University Economics professor.