You have to discount a dollar more expensive in real terms, Sandlerandia finishes

Some fragments of Economy & Regions' work:

** Transitional stabilization plans produce only a limited and ephemeral effect. On the one hand, these are plans that only stabilize the exchange rate for a short time. On the other hand, these are projects that only reduce inflation, far less than necessary; and also for a short period of time. So, sooner than later, the exchange rate rises again and inflation accelerates again.

** This incomplete and ephemeral success of transitional stabilization plans is that they are executed without reputation, credibility and poor economic design, which ultimately function as an early death certificate of the program. Officers do not believe that the plan will achieve its long-term goals, they form expectations in this regard; and ends up giving a self-fulfilling prophecy.

Weekly Nº385 – Urgente24 Press on Scribd

** In this framework lacking reputation, credibility and poor economic policies, agents anticipate and maintain high expectations of devaluation and inflation. These expectations place a high floor on observed inflation. In this context, the interest rate only drops "little" and "slowly". At the same time, inflation also falls "little" and "slowly". In fact, public expectations make the inflation rate a solid and high floor, impossible to drill.

** In short, with transitional stabilization plans, the stabilization of the exchange rate is very short term. The fall in the interest rate and the fall in inflation are "slow" and "low". As soon as possible, the exchange rate rises again and the interest rate rises. After the exchange rate jump, inflation starts to accelerate again.

** The transitional stabilization of the original Sandleris 1 plan lasted 6 months. Transient stabilization of the Sandleris 2 patch takes 4 months. In this sense, economic theory explains that it is difficult to perpetuate the temporary stabilization of the patch much more than the temporary stabilization of the initial plan.

** BCRA is the reverse of what is recommended by economics.

# First, the time horizon of monetary policy is the very short term.

# Secondly, monetary policy aims at the re-election of Macri, indicating a total dependence on PEN.

# Third, the monetary policy instrument is a slightly transparent pegging anchor of the nominal exchange rate in a context of very high inflation.

# Fourth, the monetary policy rule is discretion because there are permanent changes to the rules, and these rules have only the short-term horizon.

# Fifth, BCRA's actions are not irrevocable. At any time, they are canceled or the rules changed. In fact, no one knows what the BCRA will do after the elections, which is a scenario of uncertainty for the future.

** In this context, the BCRA's policy is to badess the exchange rate by lowering the dollar in real terms. The maximum bet is to ensure that the nominal exchange rate remains stable until the polls, and The dollar continues to contract regularly month after month until November 2019.

** Theory, reality and data explain and show that In 2020/2021, Argentina must inexorably move towards a higher real exchange rate that the current

** There is a widespread repudiation of the peso and a level of biimonarism, which ensures an upward trajectory to the real exchange rate. Economic agents do not want pesos. The
Economic agents save in dollars. Saving in dollars generates a monetary imbalance and a monetary imbalance. On the foreign exchange market, there is excess demand for dollars. In the money market, the supply of money is excessive because of the decline in money demand.

** An emerging country that does not grow up is a country doomed not to receive investment and to have an increasingly weak currency in the long run. In this context, an emerging country that does not develop is a country condemned to a high real exchange rate. Moreover, if the impossibility of growth is maintained over time, the trajectory of the real exchange rate is clearly bullish and normal, leaving aside the "gadgets" (shares, debt, IMF, etc.), it is the type of real balance change becomes more and more expensive. As Argentina did not increase 10 years ago, the real exchange rate has been rising for several years.

** In this scenario, a higher dollar must be discounted in real terms. Exporting firms would be favored to the extent that they did not increase the tax burden by increasing retentions. Internal market companies would have a more complicated scenario. The higher real exchange rate implies a poorer economy, with less ability to do business and earn money, for example; Less investment and production. On the other side and therefore, less employment and lower wages