Argentina's desperate choices

摘要

It is fitting that Domingo Cavallo should have been drafted in this week as Argentina's new economy minister—the third person to hold that job this month. He is now seen as the only man capable of maintaining the currency-board system that he set up a decade ago. That system pegs the peso by law at parity to the dollar and, in effect, hands monetary policy over to the United States Federal Reserve. Not only has the device killed hyperinflation; for much of the 1990s, it delivered strong growth. But Argentina's economy has now been locked in a recession for almost three years. The currency board has become a straitjacket.