The Race Against Time: Can Argentina's Economy Recover Before the Election Kills the Reform?

What if solving Argentina's inflation crisis required nothing more than a single televised announcement — and the government is still not making it?

Emilio Ocampo advised President Milei during his 2023 presidential campaign, spent decades as a managing director at Morgan Stanley, and has spent the better part of his career making the case for Argentina to do the one thing almost everyone agrees would work, and almost no one in power is willing to do: dollarize.

In this episode, Professor Kotlikoff, who visited Buenos Aires in November and published his own dollarization proposal in the Financial Times, sits down with Ocampo for a frank insider conversation on where Argentina actually stands, why the Milei reform is in a race against the electoral calendar, and exactly what it would take, mechanically and politically, to end Argentina's century-long cycle of inflation, default, and despair.

This is not theory. Both men have been inside the government and believe the window is closing.

What You'll Learn:

• [00:03:00] Where Argentina's inflation stands today: down from 200% to 30% annually, but the hard part is still ahead
• [00:05:08] The K-shaped recovery: energy and mining are booming while manufacturing and construction, the biggest employers, are stagnant
• [00:06:00] What Peronist corporatism actually is, and why half of Argentina's economy still runs on a philosophy lifted from Mussolini's Italy
• [00:15:42] Why Argentina's debt ratio is technically manageable but still pays 420 basis points over US Treasuries: the price of a bad reputation
• [00:18:54] Larry's Financial Times proposal: the US funds dollarization via a contingent loan, Argentina gets monetary stability, and the loan disappears unless a future government undoes the reform
• [00:41:16] The Ecuador precedent: dollarized by presidential announcement in January 2000, survived a coup 10 days later, two sovereign defaults, COVID, and oil price collapses...and is still dollarized today
• [00:45:00] Why Argentina is already de facto dollarized: surgeries paid in $100 bills, apartments priced in dollars, roughly four times more physical dollars than pesos in circulation
• [00:48:00] The mechanics of how to actually do it: set the exchange rate at market, declare the dollar legal tender, keep the peso for small change
• [00:51:32] Why December 2025, after Milei's election win and with full US Treasury support, was the optimal moment to dollarize, and why that window may be narrowing
• [01:00:00] Why Ocampo says do it today: with elections 18 months away, the probability math favors moving now instead of betting on a recovery that may not arrive in time

Featured Guest:

Emilio Ocampo is an Argentine economist, author, and professor at UCEMA in Buenos Aires. He served as economic advisor to President Milei during Argentina's 2023 presidential campaign and is internationally recognized for his work on monetary institutions, dollarization, and Latin American economic history. He previously held senior positions at Chase Manhattan Bank, Salomon Brothers, and Morgan Stanley, where he was a managing director. He is co-author of Dolarización: Una Solución para la Argentina and a regular contributor to La Nación.

Resources:

• Dolarización: Una Solución para la Argentina by Ocampo and Cachanosky: amazon.com
• Professor Kotlikoff's FT article summary (Ocampo Substack): dolarizacionargentina.substack.com
• Professor Kotlikoff's earlier dollarization piece: larrykotlikoff.substack.com
• Sargent, "The Ends of Four Big Inflations" (1982): ideas.repec.org
• 2025 US-Argentina currency swap background: wikipedia.org
• Emilio Ocampo's Substack: dolarizacionargentina.substack.com
• Economics Matters Substack: larrykotlikoff.substack.com

Economics Matters: The Podcast is hosted by Larry Kotlikoff, Professor of Economics at Boston University.

Disclaimer: Any opinions expressed on Economics Matters are those of the authors and guests. These are not the opinions of Boston University or Economic Security Planning, Inc.