About the coherence of argentina policy choices

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Reference no: EM131836073

Argentina, during the first part of this century, pegged its exchange rate at one peso per USD. It also pursued an independent and expansionary monetary/fiscal policy at the same time. Eventually this expansionary policy caused inflation in Argentina to rise well above 20 percent per year. Lastly, Argentina wanted to encourage investment in Argentina by other countries and so maintained a relatively open capital market.

What does the policy trilemma say about the coherence of Argentina’s policy choices? Explain using the trilemma’s choices.

Reference no: EM131836073

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