Re: Keynesian Christmas - Argentina

[larson@xxxxxx]

Quoting Bill Mitchell <ecwfm@xxxxxxxxxxxxxxxxxxxxxxx>:

> As long as taxation collections can be made Argentina should:
>
> (a) abandon the currency peg against the dollar.

This in combination with...

> (c) introduce a JG with wages in peso.

...could seem attractive, but as I understand it consumer loans, mortgage loans
and other household-directed credit are denominated in US currency. Dropping
the peg isn't a very good idea unless you can neutralize the exchange rate
effect on private debt with tax deductions. I doubt that's possible, but it
would be interesting to see some numbers here.
/srl

--
Sven R Larson
PhD; Assistant professor of economics
Department of Social Sciences, Bldg. 22.2
Roskilde University
Pb 260
DK-4000 Roskilde
Telephone: (+45) 4674 2910