Travel Reference
In-Depth Information
Price Inflation in Argentina, 1980-2001
Year
Percent
Year
Percent
1980
101
1991
172
1981
105
1992
25
1982
165
1993
7
1983
343
1994
4
1984
627
1995
3
1985
672
1996
0
1986
90
1997
1
1987
132
1998
1
1988
343
1999
-1
1989
3,079
2000
-1
1990
2,314
2001
-1
Source:
EconomistIntelligenceUnitCountryReport:Argentina(1980-2002)
laureate Milton Friedman. In Chile, the “Chicago Boys” had gained
recognition for helping military dictator Augusto Pinochet combat
inflation and return the economy to growth. Cavallo adopted the
strategies of the Chicago School to manage Argentina's peso. His “con-
vertibility plan” retired the worthless austral created under Alfonsín
and issued a new peso note fixed on par to the U.S. dollar. Moreover,
Cavallo removed monetary control from the government (always
inclined to print its way to temporary popularity). The Central Bank
could not issue new paper money without having its equivalent in
dollar deposits. The monetary reform provided an immediate antidote
to inflation, which declined from more than 3,000 percent to 7 per-
cent within five years.
In addition, the new economic team sought closer trade relations
with the international community, particularly its neighbors. In 1991,
Menem met with the presidents of Brazil, Paraguay, and Uruguay to
form the Mercado Común del Sur (Common Market of the South),
better known as Mercosur. Chile and Bolivia later joined Mercosur as
associate members. This regional common market lowered or elimi-
nated tariffs on trade between member states and established common
standards for trade with other countries. Immediately, the grain and
