The economist Steve Hankethe main promoter of dollarization in the world, urged the president on Thursday Javier Milei after the inflation data for August.
Hanke is a professor of applied economics at Johns Hopkins University. In Argentina, he advised President Carlos Menem during his term in office from 1989 to 1999, and collaborated with former Economy Minister Domingo Cavallo from 1995 to 1996.
He also played a key role as an advisor to Montenegro’s President Milo Dukanovic in planning and implementing the country’s dollarization in 1999. He also served as an advisor to Ecuador’s Minister of Economy and Finance Carlos Julio Emanuel during Ecuador’s dollarization process in 2001.
After learning the inflation data for August, Hanke wrote: “Argentina’s inflation ranks 5TH HIGHEST in the WORLD on this week’s #HankeInflationDashboard. I accurately calculate Argentina’s inflation is a PENAL 80% annually. Time for President Milei to DOLLARIZE.”
In addition to his focus on dollarization and monetary stability, Hanke has been noted for developing the “Hanke Inflation Dashboard”a tool that measures inflation in real time in various countries, providing an alternative view to official data. He is known for his critical stance towards central banks and his skepticism regarding the effectiveness of monetary intervention policies.
It should be noted that inflation stood at 4.2% in August, some 0.2 percentage points (pp) above July, when it was 4%. Thus, the Consumer Price Index (CPI) failed to break through the 4% threshold and closed above expectations, which were around 3.9%.
A little less ago, the American economist stated that to resolve the inflationary crisis we must “close” the Central Bank, by supporting the dollarization proposal promoted by the presidential candidate of La Libertad Avanza, Javier Milei.
“The only way to solve the systemic problem of inflation in Argentina is to close the Central Bank and the peso and put them in a museum,” said the economist.
What connection does Steve Hanke have with Javier Milei?
“I am focused on one element of Javier Milei’s platform, dollarization, which is the only economic medicine that can save the patient,” he explained in statements to the press. In that same sense, he affirmed that said project “would simply free Argentina from the peso, which is the fuel of economic instability and poverty.”
Speaking about his ties with the presidential candidate, he said: “I am not in direct contact with Milei. However, I am in contact with some of his advisors regarding the issue of dollarization.”
He added that he is currently “working with them on a working paper that addresses objections to dollarization and the clichés that its opponents bring up.”
Hanke described economists who criticize dollarization as “inexperienced” and noted that “one of the arguments that opponents of dollarization often use in Argentina is that, with the dollar, Argentina would have no way of defending itself from external economic shocks.”
Rebutting the argument, he said that such a view “is so pathetic that it’s funny, since the BCRA has a history of being an institution that has truly refined the art and science of generating economic shocks.”
Hanke explained that there are several models and, after recalling that he was an advisor in the dollarization processes of Montenegro, Ecuador and Zimbabwe, stated that “they were all very successful.”
Finally, he argued that dollarization “has always resulted in the establishment of stability and a basis for economic boom and prosperity.”
Source: Ambito
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