Question A:

The fundamental cause of Argentina’s high inflation is unfunded fiscal commitments that are being financed by the central bank.

Responses weighted by each expert's confidence

Question B:

Even if Argentina could marshal the resources to make a full switch to using US dollars for domestic transactions, it would substantially increase the volatility of Argentine GDP.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Agree
6
Bio/Vote History
My understanding is that they have indeed been printing money to finance expenditures in the medium term.
Antras
Pol Antras
Harvard
Agree
6
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Agree
9
Bio/Vote History
Bloom
Nicholas Bloom
Stanford
Agree
4
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Botticini
Maristella Botticini
Bocconi
Agree
7
Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Agree
7
Bio/Vote History
Also bad luck recently, with the drought.
Carletti
Elena Carletti
Bocconi Did Not Answer Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Agree
5
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
8
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Agree
7
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
No Opinion
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Strongly Agree
7
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt Did Not Answer Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
7
Bio/Vote History
Garicano
Luis Garicano
LSE
Strongly Agree
10
Bio/Vote History
Gorodnichenko
Yuriy Gorodnichenko
Berkeley
Strongly Agree
9
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth Did Not Answer Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Strongly Agree
7
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Strongly Agree
8
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Strongly Agree
10
Bio/Vote History
Javorcik
Beata Javorcik
University of Oxford Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Uncertain
5
Bio/Vote History
Don't know enough about Argentina's fiscal history to judge.
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
4
Bio/Vote History
Of course many countries have unfunded fiscal commitments, so the magnitude of those commitments matters.
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Agree
8
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Agree
5
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
No Opinion
Bio/Vote History
Persson
Torsten Persson
Stockholm University
Agree
6
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Strongly Agree
10
Bio/Vote History
Like 1999-2001. Ended in debt default.
Prendergast
Canice Prendergast
Chicago Booth
Agree
5
Bio/Vote History
Propper
Carol Propper
Imperial College London
Agree
4
Bio/Vote History
Rasul
Imran Rasul
University College London Did Not Answer Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School Did Not Answer Bio/Vote History
Reis
Ricardo Reis
London School of Economics
Agree
8
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Agree
4
Bio/Vote History
Rey
Hélène Rey
London Business School
Agree
7
Bio/Vote History
Schoar
Antoinette Schoar
MIT
Agree
6
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Strongly Agree
9
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Agree
4
Bio/Vote History
Tenreyro
Silvana Tenreyro
LSE
Agree
9
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
6
Bio/Vote History
Van der Ploeg
Rick Van der Ploeg
Oxford
Strongly Agree
7
Bio/Vote History
Unfunded fiscal deficits leads to explosion of monetary growth and consequent inflation and depreciations of the currency.
Vickers
John Vickers
Oxford
Agree
5
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Agree
8
Bio/Vote History
Whelan
Karl Whelan
University College Dublin Did Not Answer Bio/Vote History
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Strongly Agree
9
Bio/Vote History
What else is new?

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Uncertain
4
Bio/Vote History
This is a very interesting question. The answer seems to depend on how willing people are to bring dollars back from the US where many of them have their savings. If they had trust that the dollars wouldn't be taken, there would be no problem. But it seems doubtful they do.
Antras
Pol Antras
Harvard
Agree
7
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Agree
9
Bio/Vote History
The economy is very volatile under the existing system. It would be volatile in a different way, not being able to use m policy or the e rate for stabilization.
Bloom
Nicholas Bloom
Stanford
Uncertain
3
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Botticini
Maristella Botticini
Bocconi
Agree
7
Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Uncertain
5
Bio/Vote History
In principle yes, since monetary policy could no longer be used to stabilize the economy. In practice maybe not, at least in the short term, since you need a credible central bank to carry out a meaningful monetary policy.
Carletti
Elena Carletti
Bocconi Did Not Answer Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Uncertain
1
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
6
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Uncertain
6
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
No Opinion
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
No Opinion
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt Did Not Answer Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
7
Bio/Vote History
Garicano
Luis Garicano
LSE
Agree
5
Bio/Vote History
Gorodnichenko
Yuriy Gorodnichenko
Berkeley
Strongly Agree
9
Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth Did Not Answer Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Agree
7
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Agree
8
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Agree
10
Bio/Vote History
Not just because it would mean loss of monetary policy independence (maybe not much of a loss for Argentina, but because it would not per se stabilize fiscal policy or remove the threat of disruptive government interference with banking to which Argentina has long been prone.
Javorcik
Beata Javorcik
University of Oxford Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Disagree
3
Bio/Vote History
If GDP is measured in USD, then exchange rate and inflation will tend to move in opposite directions, stabilizing GDP numbers.
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
3
Bio/Vote History
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Uncertain
8
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Uncertain
1
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
No Opinion
Bio/Vote History
Persson
Torsten Persson
Stockholm University
Agree
5
Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Strongly Agree
10
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Agree
5
Bio/Vote History
Propper
Carol Propper
Imperial College London
No Opinion
Bio/Vote History
Rasul
Imran Rasul
University College London Did Not Answer Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School Did Not Answer Bio/Vote History
Reis
Ricardo Reis
London School of Economics
Uncertain
8
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Uncertain
4
Bio/Vote History
Rey
Hélène Rey
London Business School
Agree
7
Bio/Vote History
volatility in the medium run. No lender of last resort for example.
Schoar
Antoinette Schoar
MIT
Uncertain
6
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Uncertain
8
Bio/Vote History
Once Argentina has dollarized, the effect on volatility of growth will depend on how the government is able to make up for the fall in seigniorage. If dollarization is associated with commitment to better policies, volatility will call. If not, volatility could increase
Sturm
Daniel Sturm
London School of Economics
Uncertain
3
Bio/Vote History
Tenreyro
Silvana Tenreyro
LSE
Agree
7
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
8
Bio/Vote History
Van der Ploeg
Rick Van der Ploeg
Oxford
Agree
5
Bio/Vote History
Vickers
John Vickers
Oxford
Uncertain
3
Bio/Vote History
That's an enormous "Even if ...".
Voth
Hans-Joachim Voth
University of Zurich
Agree
8
Bio/Vote History
Whelan
Karl Whelan
University College Dublin Did Not Answer Bio/Vote History
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Disagree
9
Bio/Vote History
Sure, losing the exchange rate instrument can be detrimental. But runaway inflation and repeated debt defaults are much more destabilizing.