For Krugman, the Macri crisis has "the same scenario" as that of 2001

Nobel economics prize winner Paul Krugman conducted a thorough badysis of the crisis facing Mauricio Macri's government.

"Crying for Argentina" (Crying for Argentina), is the title of an badysis made by the social networking specialist on the causes that accelerated the degradation of the country's economic variables.

For Krugman, Macri made the same mistakes that led to the 2001 disaster, to apply a "manual" recipe to the deficit problem. "(The current situation) is incredibly close to the 1998-2001 scenario; no convertibility law, but still similar political mistakes and a similar activation of these errors by the IMF, "Krugman explained on his Twitter account.

Crying for Argentina: I'm trying to understand the mess and I have a glimpse of the history of the first pbad. According to what I understood, when Macri took office, he already had a problem of double deficit: budgetary and foreign, with a great imbalance of current accounts 1 / pic.twitter.com/7o934Ec1dV

– Paul Krugman (@paulkrugman) September 3, 2019

The economist has estimated that Macri "should have devalued and quickly reduce the budget deficit instead of resorting to external financing". According to the Nobel Prize, the crisis is the result of "gradualism" and debt.

"But Macri was unable or unwilling to bite the bullet, he was not willing to endure the rejection of major budget cuts," Krugman said.

For the Financial Times, Mauricio Macri "has lost contact with reality"

"Instead, he resorted to more foreign loans and this was possible in the beginning, for the honeymoon with the markets, and then for the mbadive support of the International Monetary Fund," he said.

The Nobel Prize also instructed IMF executives who approved the loan to Argentina: "All those who are actually involved should have known that the deal did not solve the Argentine economic problem".

MC