Argentina was among the wealthiest economies at the beginning of the twentieth century, according to the “Argentine Paradox” case study by Harvard Professor Rafael di Tella and New Change FX Chief Operations Officer Ingrid Vogel. The authors claim that under the global gold standard, international capital flooded into the country to exploit the unbounded investment opportunities. The economy maintained an average annual inflation rate of just 1.5 percent for fifty years after 1890. Parallel to low inflation, from 1900 to 1930, Argentina’s economy grew at an average annual rate of 4 percent—faster than the United States, Australia, or Canada. However, over the turn of the new millennium, Argentina no longer featured among the group of richest nations but rather languished toward the bottom of the middle-income group. This demise came despite the country’s natural resources and fertile land, the large flows of ambitious immigrants, and the high level of education. The political development of Argentina during this period had gone through several phases. Among the dominant figures were President Juan Domingo Perón and his charismatic wife Evita. Their populist policies had fundamentally shaped Argentina’s political, economic, and social evolution. Among the most notorious and devastating is a trade and economic policy that advocates replacing imports with domestic production known as industrialization through the substitution of imports. In addition to closing the economy to foreign trade mainly by increasing tariffs and quotas (including export tariffs), a variety of private companies and natural resources were nationalized.

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