Re: Argentina and free trade

["Federico Todeschini" <todeschinisat@xxxxxxxxxxxxxx>]

I dont think the argument about devaluation is good enough for Argentina.
Our Public Utilities are also pegged with the dollar (USA inflation), and
they are a very important part of the Argentina problem, and it cant be
solved just with a devaluation.

----- Original Message -----
From: "pdavidso" <pdavidso@xxxxxxx>
To: "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Tuesday, December 11, 2001 12:20 PM
Subject: Re: Argentina and free trade


> >===== Original Message From "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
=====
> >     Henry Liu puts forth Argentina as an
> >example that somehow shows the problems
> >of free trade.  Hardly.  Argentina's problems
> >clearly arise from its pegging of the peso to
> >the US dollar at an overvalued rate.  This is
> >a macroeconomic problem, not a microeconomic
> >one due to free trade as such.  If it had devalued
> >when its main trading partner, Brazil, did, I doubt
> >it would be in the recession it is in now.
> >Barkley Rosser
>
> And it also  suggests why dollarization does not solve balance of payments
> problems when a nation trades with other nations linked to the euro, yen
or
> freely floating against the dollar.
>
> paul
>
> Paul Davidson
> Editor, Journal of Post Keynesian Economics
> University of Tennessee
> SMC 523
> Knoxville, Tennessee 37996-0550
> phone # (865)974-4221; fax #(561)737-8262;
> email pdavidson@xxxxxxx
>
>