How Argentina and Japan continue to confound macroeconomists
Bold new policy frameworks have failed to break long-standing habits
MANY PEOPLE make fun of macroeconomics. But any theory that must explain both Argentina and Japan deserves sympathy. Why, in particular, is inflation so stubbornly high in one and low in the other? In Argentina, consumer prices were 50% higher in February than a year earlier, the fastest increase since 1991. In Japan over the same period, inflation was less than 0.2%, equalling the lowest rate since 2016.
This article appeared in the Finance & economics section of the print edition under the headline “Exceptions and rules”
Finance & economics March 30th 2019
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