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DAVID ALTIG AND BRAD SETSER ASK HOW IMPORTANT IT IS WHAT we call Argentina’s monetary system of April 1991-January 2002. I consider it crucial because clear, consistent terminology helps us understand how the system worked and to what extent it resembled other systems to which we may wish to compare it. Unclear, inconsistent terminology hinders our understanding. It can result in bad advice that hurts many people. Economists contributed to Argentina’s severe economic troubles of 2001-2002 by misunderstanding the monetary system and foreclosing consideration of policies that a more accurate diagnosis would have left open.
This article is a response to Damned If You Do: Comment on Schuler’s Argentina Analysis by David Altig (EJW, January 2006) and Argentina’s Problems Went Far Beyond the Absence of a Strict Currency Board: Comment on Schuler by Brad Setser (EJW, January 2006).