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

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

Since 1943 there has been official data on the general increase in prices; in these 80 years, in only 17 years was the annual inflation less than two digits, but in 16 years it was greater than three digits and the total average for the period is 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.

A stabilization program 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 policies and revenue policies . They present a taxonomy based on the different combinations of these types of measures.

From a theoretical perspective, two main groups of measures can be distinguished: orthodox and heterodox policies.

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 a drop in output and, consequently, an increase in unemployment in the short term in both cases, focusing on fiscal restrictions.

Meanwhile, heterodox policies arise from the recurring impossibility of changing the 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 temporal 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 all at once.

Meanwhile, gradualism is the application of measures or reforms that are implemented over time, 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.

Next, eight stabilization programs or plans are analyzed, referencing the political and economic context in which these decisions were made. The analysis covers the period from the 1952 economic plan to the 2017 inflation targets.