Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

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4. Conclusions This paper has estimated the CPI measurement bias for Argentina during its recent democratic period. While we use a methodology that unveils the bias from the inconsistencies between the assumption of stable Engel curves and the evolution of the share of food in expenditures, we innovate in that we obtain identification from individual differences in the consumption bundles and price indexes at the household level, thus being able to estimate the bias with data from only one region, something that had not been done in previous work. The findings are striking. Argentina’s democracy has experienced a larger (much larger) raise in real expenditure levels than previously thought, and has improved its income distribution. The bias in expenditure levels arises primarily between 84/85 and 96/97. It is difficult with further data to estimate when the bias may be originating. 84/85 were years of very high inflation, thus the data may be underestimating the level of regressivity in the income distribution those years. Additionally, the late eighties and early nineties showed a period of significant opening up of the economy that led to a significant increase in income levels. Because openness comes with large changes in the quantity and quality of available products it is not surprising that during these period we may have experienced substantial increases in economic well being not fully reflected in standard statistics. The second period is a bit more puzzling. While the data suggests an overestimation of the CPI, the level of this overestimation appears to be small. However, the bias in income distribution appears to be larger. This is puzzling because the later period sees a rising inflation, indicating, a priori, that there should be deterioration in the income distribution levels. All in all, our conclusion, however, is that Argentina’s democracy has allowed for a much brighter performance in economic terms than it is usually credited for. Far from the typically pessimism that permeates the recollection of Argentina’s history and Argentina’s present, we provide an optimistic view of the last 25 years, which we hope will be the beginning of a brighter XXIst century for the country and the region.
Appendix A: Estimation strategy Estimating CPI biases Following Costa (2001) the estimation strategy starts formally form the following equation: ( PFjt − ln PNjt ) + β ( lnYijt − ln PGjt ) + θ x X ijt ijt w ijt = φ + γ ln ∑ + µ , (1) where w ijt is the ratio of food to nonfood of household i, in region j at time t ; P Fjt is the true unobservable price of food in region j at time t ; P Njt is the true and unobservable price of non food in region j at time t ; Y ijt is nominal income for household i, in region j at time t ; PGjt is the true and unobservable general price level in region j at time t; X ijt is a set of control variables for household i, in region j at time t ; µ ijt is a random term; φ ,γ , β , and the different θ x are parameters. If we call ∏ Gjt the cumulative percentage growth of the observable CPI in region j, since time 0 and time t ; ∏ Fjt the cumulative percentage growth of the price of food, in region j, between time 0 and time t ; ∏ Njt the cumulative percentage growth of the price of nonfood, in region j, between time 0 and time t ; E Gjt the cumulative percentage increase in the measurement error in the CPI in region j, between time 0 and time t ; E Fjt the cumulative percentage increase in the measurement error in the price of food, in region j, between time 0 and time t ; E Njt the cumulative percentage increase in the measurement error in the price of nonfood, in region j, between time 0 and time t ; we can rewrite (1) as: w ijt [ ln( 1+ ∏Fjt ) − ln( 1+ ∏ Njt )] + β[ lnYijt − ln( + ∏Gjt )] [ ln PFj0 − ln PNj0] − β ln PGj0 [ ln( 1+ E ) − ln( 1+ E )] − β ln( + E ) = φ + γ 1 + γ + γ 1 x Fjt x X ijt µ ijt Njt + ∑ θ + . (2) If we assume that the mismeasurement does not change across regions, we can rewrite (2) as: x Gjt
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Exceptional Argentina Di Tella, Gla
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A third explanation of Argentina’
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Maddison's "Western Offshoots" by l
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A final point on this mechanistic a
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GDP in 1900 at 12,100 (in constant
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nationalized railways and banks, to
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country interacted with initial con
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1900. As there is an extremely stro
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Between the 1940s and 1970s income
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particularly in terms of food consu
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Even before the 2001 crisis, Argent
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Scandinavia and Northern Europe the
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Figure 4. A modified Human Developm
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Figure 6. Per capita GDP across Arg
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production 15 . Moreover, beyond st
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Figure 10. Average weight of export
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etween the prewar export-led growth
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which was wholly bound to local dem
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protectionism", certainly stronger
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agricultural pastures and cropland
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far. Argentina's differential popul
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Appendix Figure A. 1. Argentina's r
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Peru 35 38 25 34 34 34 32 29 26 27
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Like the Llach paper, the Campante
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I. Introduction Both Buenos Aires a
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across the ocean. Over the course o
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Buenos Aires’ hinterland rose dra
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significantly greater education lev
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Why is there such a difference in l
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illion dollars today). Each Chicago
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Chicago also appears to have been a
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casualties. Roca secured the presid
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capital to St. Petersburg he was pr
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and the logarithm of per capita GDP
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Moreover, years of schooling today
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y its overwhelming political import
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200 Figure 2a: Annual Wage Data 187
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Figure 3: Real Monthly Wages in Chi
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Log GDP per capita 2000 5 6 7 8 9 1
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Figure 7 Log GDP per capita 2000 7
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Table 2: Top 5 Industries in Chicag
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Table 4: 19th Century Variables and
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A simple calculation suggests that
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toy model with a minimum of paramet
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were lifted, but import taxes remai
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to compute that the MPK term above
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versus foreigners, on most occasion
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X institutions policies income p
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series variation. The coincidence o
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Figure 1—The Great Divergence and
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Figure 3—Trade taxes
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Transition Remarks The previous ess
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CHAPTER FOUR Argentine Trade Polici
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Argentine comparative advantage lie
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thousands of product lines in Argen
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Japan). Third, the agricultural pro
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different preferences over trade pr
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two nomenclatures had to be manuall
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esult, soybeans were finally adopte
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Figure 1 Trade Openness Exports + I
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Figure 5 Relative Sectoral Protecti
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Figure 7 Average Export Taxes 0 10
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Figure 9 Average Export Taxes at 2-
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Figure 11 Evolution of Argentine Ag
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Figure 13 Yields in Agriculture: Wh
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Table 2 Livestock per Capita 1895 C
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Table 5 Mean Share of Exports (Impo
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Table 7 Tariff Statistics for perio
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Table 9 Evolution of Industrial Pro
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CHAPTER FIVE Path-Dependent Import-
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actors, and they were demanding pro
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the primary sector, using land and
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Figure 1: The Long Run: Four Region
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Finally, in the reversal of pattern
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Figure 3: Medium Run Preferences ov
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sector to give rise to a protection
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technological improvements or incre
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Argentina did relatively well when
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World War, a second globalization e
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Argentine primary sector and ensure
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Clearly, world market conditions we
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for the years to come. The most imp
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governments zigzagged in their poli
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public spending on infrastructure s
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understand the rise of the urban-ru
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To sum up, by the beginning of the
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has a comparative advantage in the
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L λ = m L K κ = m K That is, λ i
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K c a = 1− α 1−α T A ( κ )
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Given a set of parameters ϒ , φ a
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consumption of good i. For any agen
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Proposition 3 In the short run, pro
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ρ 1/ 1 ρ ρ 1 ( ξ ξ ) 1 TT K ,
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Up to 2008, the FPV government had
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negative correlation between the pr
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policies would, supposedly, eviscer
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I. Introduction In a seminal study,
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terms, Peronist beliefs in the 1990
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Several authors have emphasized the
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foreign capital and trade as the gl
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of already available information. A
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having the need to do more than wak
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Argentines (who implement these pol
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opinion about elements of capitalis
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intense (the proportion is under 1.
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involved in social ordering that wi
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cost of the deviating firm, since w
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Admissible Region Bounds on w b Nex
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The previous proposition may be par
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and note that Peron insists on the
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Appendix 2: Definitions of Variable
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Table II: The Beliefs of Peronists
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Transition Remarks The previous cha
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CHAPTER SEVEN A Short Episodic Hist
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the income distribution between 193
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empirical evidence and on existing
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of commodities. The country was off
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accounts increased by 8% between 19
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Argentina in 1942 (4.1%) is not ver
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This change in inequality is also r
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1982, when Mexico’s default on it
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1995. While growth bounced back qui
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The main characteristics of this ep
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skilled workers that more than offs
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Household Expenditure Survey. An in
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The relationship between internatio
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machinery and equipment can acceler
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occurred not only in production tec
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a relative abundance of rents to sh
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even when the number of well-off in
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and similar patterns emerge when co
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This chapter described the level an
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Transition Remarks Economic success
Page 267 and 268: CHAPTER EIGHT Why do Argentines tru
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Page 293 and 294: Table 6. Tierra del Fuego Subinspec
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Page 303 and 304: Figure 2. Basic Statistics Food Clo
Page 305 and 306: Table 2 Dep. Var.: Share of food Sm
Page 307 and 308: Figure 3. Variety in food retailing
Page 309 and 310: Table 3 Dep. Var.: Share of food at
Page 311 and 312: 3.3 Income distribution effects The
Page 313 and 314: Figure 6. Individual Effects Using
Page 315 and 316: Expenditure Income 5000 6000 4000 4
Page 317: Figure 10. Income distribution Dens
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Page 323 and 324: 2.2 Income distribution effects Fol
Page 325 and 326: Appendix B: The data To run our est
Page 327 and 328: Appendix C: Additional tables C1: B
Page 329 and 330: C3: Table 3 coefficients Dummy for
Page 331 and 332: CONCLUSION 20 th century Argentina
Page 333 and 334: can be harbingers of worse things t
Page 335 and 336: Ahumada, Hildegart, Alfredo Canaves
Page 337 and 338: Barro, Robert J. 2005. “Rare Even
Page 339 and 340: Burzaco, Eugenio et al. 2004. “Ma
Page 341 and 342: Cortés Conde, Roberto and María M
Page 343 and 344: Di Tella, Rafael, Juan Dubra and Ro
Page 345 and 346: Gaggero, Horacio and Alicia Garro.
Page 347 and 348: Gerchunoff, Pablo, Fernando Rocchi
Page 349 and 350: James, Daniel. 1988. “October 17
Page 351 and 352: Maddison, Angus. 2006. The World Ec
Page 353 and 354: Piketty, T. 2003. “Income Inequal
Page 355 and 356: Spiller, Pablo and Mariano Tommasi.
Page 357: Williamson, Jeffrey G. 1995. “The
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Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

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