Analyzing recent price anomalies in Argentina: Global influences and domestic distortions

Emiliano Basco (), Emilio Blanco (), Luis Libonatti () and Ignacio López Gaffney ()
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Emiliano Basco: Central Bank of Argentina
Emilio Blanco: Central Bank of Argentina
Luis Libonatti: Central Bank of Argentina
Ignacio López Gaffney: Yale University

No 2025118, BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department

Abstract: This study investigates Argentina’s unusually high and persistent goods inflation in the af-termath of the COVID-19 pandemic, using a cross-country monthly panel and a model thatdecomposes inflation into observable marginal costs, global price pass-through, and changingmarkups. We find that, at their peak in January 2024, goods price markups were approx-imately40%higher than in November 2011. Further analysis indicates that these elevatedmarkups were primarily driven by distortionary policy interventions—particularly foreign ex-change controls, non-tariff barriers, and complex import regulations—which disrupted marketpricing mechanisms and significantly amplified inflation, positioning Argentina as a clear out-lier in the global inflation cycle.

Keywords: inflation dynamics; goods prices; Argentina; foreign exchange controls; global factors (search for similar items in EconPapers)
JEL-codes: E31 E58 F41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2025-07
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