Argentine Senator Cristina Fernandez Kirchner seems to be headed for a solid first-round victory in today’s presidential election, and a new paper from the Center for Economic and Policy Research (CEPR) looks at the economic expansion that has propelled her candidacy. "Argentina challenged the conventional economic wisdom, and won," says economist Mark Weisbrot, co-Director of CEPR and lead author of the paper. Argentina's economy has grown by more than 50% in real (inflation-adjusted) terms during the past five and one half years of expansion, making it the fastest-growing economy in the Western Hemisphere. Unemployment fell from 21.5 to 9.6%, and more than 11 million people, or 28% of the population, have been pulled across the poverty line. Real wages have increased by more than 40 percent.
A number of policy choices seem to have contributed to the recovery, some of them unorthodox and controversial. Among these were: the Central Bank's targeting of a stable and competitive real exchange rate; Argentina's break with the IMF and its policy prescriptions; and its tough bargaining with international creditors over defaulted external debt. The paper, Argentina's Economic Recovery: Policy Choices and Implications, looks at these and other policies, as well as the role of the IMF during the recovery. The authors argue that Argentina's recovery and its successful macroeconomic policies may have important lessons for other middle-income and also low-income countries. This is especially true at a time when the influence of the IMF and allied institutions over economic policy has declined drastically in recent years. The paper also looks at the current state of the economy.