Commentary

Letter to the Editor: Inflation Rate Is at 63% in Argentina

Dear Sir:

In combat, John Maynard Keynes often had an edge simply because he had a good feel for the data and a sense of magnitudes. Those who report on economics and finance (among others) could benefit from paying attention to that little Keynesian attribute.

Your report on Argentina’s most recent economic travails (“Currencies hit in wake of Argentina”, January 25) is a case in point. Your reporters note that one of the main causes of Argentina’s problems is that Buenos Aires “has allowed inflation to reach 25 per cent”. The Johns Hopkins-Cato Institute Troubled Currencies Project, which I direct, has been producing reliable estimates for Argentina’s implied annual inflation rate since 2012. Our current estimate is 63 per cent — more than double the figure reported in the FT.

Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute in Washington, D.C.