La inflation It is a long-standing phenomenon in Argentina, and the latest available data from August 2023 places the increase in the monthly consumer price index at 12.44%.

The highest value since 1991, when the country was emerging from the last hyperinflationary process.

Since 1943 there are official data on the general increase in prices, in these 80 years, in only 17 years the annual inflation was less than double digits, but in 16 years it was higher than three digits and the Total average of the period stands at 146.98%.

Not only is inflation high and persistent in Argentina, but in general it was, and still is, one of the countries with the highest inflation in the world.

This report, which is part of a series of works that has the inflationary phenomenon as the central axis, focuses on the different anti-inflationary plans and policies that were applied in Argentina.

Why is it important to know the measures that were once taken in our country? Because different stabilization programs and plans have been implemented with mixed results.

Therefore, in order to understand what type of plan could be successful (and which could not) in the future, it is necessary to know the experiences that the local economy has gone through.

Un stabilization program It is understood as a set of monetary, fiscal and balance of payments policies aimed at resolving short-term macroeconomic instabilities.

That is to say, a stable economy is assumed “a priori” that has a temporary imbalance, and it needs to be resolved so as not to generate too many consequences for the population, without requiring a structural change.

However, the stabilization plans have been taken as a starting point to make structural changes, although as long as short-term measures are taken.

Dornmush and Simonsen (1987) distinguish between fiscal austerity y income policies. They present a taxonomy according to the different combinations of these types of measures.

Exposed at a theoretical level, two large groups of measures are distinguished, the policies orthodox y heterodox.

Although these may seem antagonistic, they are not mutually exclusive and stabilization programs can accommodate a combination of both types.

Orthodox anti-inflationary policies are based on controlling aggregate demand and the factors that produce expansion of the money supply.

These types of measures can entail significant costs, in terms of recession and fall in product and, consequently, increase in unemployment in the short term in both cases, focusing on tax restrictions.

While heterodox policies are born from the impossibility that recurrently arises from change expectations of economic agents.

This type of measure focuses on key prices and income (for example, salaries) to focus on the inertial component of inflation, in addition to the fiscal component previously mentioned.

But the temporary component of the measures adopted must also be taken into account, the shock refers to the fact that the measures and reforms of the stabilization plan must be introduced simultaneously and in one go.

While the gradualism It is the application of measures or reforms that are implemented over time and seeking intermediate objectives.

The argument of shock policies is to take advantage of the credibility or political support that a government team has.

They are rapid and profound reforms, which are proposed in an irreversible manner. The difference with gradualism is that it allows the measures applied to be corrected according to the results.

Irreversibility is an advantage that shock policies have only if the correct measures are taken, otherwise the cost can be very high, due to the loss of credibility and political support.

Then 8 stabilization programs or plans are analyzed with reference to the political and economic context where these decisions are made. It covers from the economic plan of 1952 to the inflation goals of 2017.