Comparing Argentina's Inflation Story with the USA's

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Nicolas Cachanosky

An inflation comparison from the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff.

A recent Mercatus Center podcast with Argentinian economist Nicolas Cachanosky, research professor at University of Texas El Paso, unveiled some statistics that make for an interesting comparison.

1) Average annual U.S. inflation rate since 1945: 3.69%.

3.69% compounded over 79 years has generated a 17-fold increase in prices (compared to a 4% decline in prices in the 76 years between the Civil War and World War II).

2) Average annual Argentine inflation rate since 1960: 60%.

60% compounded over 79 years would generate a 13.3 quadrillion-fold increase in prices. Placed in percentage terms that’s an unbelievable 1.33 quintillion percent price hike.

At that rate of debasement, if you owned the equivalent of the entire planet’s GDP the central bank would whittle your earthly fortune down to 8/10ths of one cent.

Meanwhile during the mere 64 years since 1960 a 60% annualized inflation rate has actually generated "only" a 1.16 quadrillion percent price increase.

But “neo-fascist” Javier Milei, who was sworn in five months ago, is the problem and his proposal to dollarize the Argentine economy is no solution.