What Ever Happened to the Misery Index?

Remember the 1960s? The 1970s? Back then, inflation surged from one peak to another but failed to deliver the low unemployment rates promised by the Phillips curve. In fit of frustration, economist Arthur Okun invented what he called the misery index—the sum of the inflation and unemployment rates. As the following chart shows, those were […]

Argentina’s Default: A Not-So-Illogical Move

Argentina failed to reach an agreement with its holdout creditors last week, defaulting on its debt for the second time in thirteen years. In this piece for Foreign Policy, I explain why this outcome is not so surprising. You can read the beginning of the piece below:  On July 30, Argentina defaulted on its outstanding debt. The technical […]

Argentina Defaults: The Day After

Argentina has defaulted. The long-running court drama that ran for over ten years and pitted Argentina against a small group of holdout creditors was decided decisively in favor of the holdouts in June, and Argentina subsequently refused to make payments as required by the courts. As a result, neither the holdouts nor the holders of […]

Argentina Wins/Loses

Argentina won an important contest last night at the World Cup, on a fine Messi goal.  However, while I’m a firm believer that nothing is more important than football, Argentina’s loss at the U.S. Supreme Court this morning may have larger long-term consequences. Without comment, the court rejected Argentina’s appeal of an earlier lower court […]

Argentina: The Myth of a Century of Decline

On February 15 The Economist printed an interesting article about Argentina: “The tragedy of Argentina. A century of decline” with the subtitle, “One hundred years ago Argentina was the future. What went wrong?” As usual in that magazine, it is a nicely written article. But it is not, in my view, an accurate interpretation of […]

Interpreting Recent Emerging Market Currency Movements

Expectations of central bank policies are only part of the story The rapid decline in emerging market currency values has been quite remarkable: Figure 1: Log exchange rates against USD for India (dark blue), South Africa (red), Turkey (green), Brazil (teal), Thailand (chartreuse), and Argentina (purple), all normalized to 2013M05=0. January data is for 1/22. Source: […]

Five Policy Issues for 2014

Earlier this week I highlighted five issues that could prove particularly thorny for international economic policymakers this year.  They were: – A further sharp depreciation of the yen, in a scenario where the Bank of Japan needs to double down on quantitative easing (QE) to achieve it’s two percent inflation target. – A widening of external imbalances notably in Germany […]

Argentina and Elliot, Again

On October 7 the Financial Times published an article by Jay Newman, a senior member of Elliot Management Corporation, the vulture fund that has a long-standing dispute with Argentina, criticizing this country for what he argued was its unwillingness to negotiate with them. A couple of days later the FT published a letter from Danny […]

Argentina and the Presentation to the Second Circuit US Court of Appeals

Argentina’s debt crisis of 2001/2002 was a profound and painful one. The 2005 restructuring proposal reflected the difficulties suffered by the country (see my blog http://www.economonitor.com/blog/2008/09/some-reflections-on-argentinas-debt-restructuring/). The acceptance reached about 74%, therefore there was still a substantial percentage of holdouts. Sometime in 2006 or 2007, and for reasons that still escape me, people from an […]

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