In this special episode of Economics Matters -- the Podcast, I discuss South America's generally dreadful economic status with two former classmates and lifetime friends -- Sebastian Piñera and Domingo Cavallo. But our primary focus is on just-elected Argentine President Milei's plan to dollarize the Argentine peso. There are no two people on the planet better suited to discuss these topics. President Piñera was elected twice to Chile's presidency. And Minister Cavallo, served twice as Argentina's Economics Minister, is responsible for pegging the peso on a one-to-one basis with the dollar during the Menem Presidency. This is as close as Argentina has gotten to dollarizing. But it falls short of President Milei's aspiration. Do listen/watch this podcast with two brilliant leaders who remain strongly optimistic about South America's economic rebirth and President Milei's potential to end Argentina's worsening economic misery. Here are our guests Wiki bios:
Miguel Juan Sebastián Piñera Echenique (Spanish: [miˈɣel ˈxwan seβasˈtjam piˈɲeɾa etʃeˈnike] ⓘ; born 1 December 1949) is a Chilean billionaire businessman and politician who served as president of Chile from 2010 to 2014 and again from 2018 to 2022.
The son of a Christian Democratic politician and diplomat, he studied business administration at the Pontifical Catholic University of Chile and economics at Harvard University. As of January 2023, he had an estimated net worth of $2.7 billion, according to Forbes, making him one of the richest people in Chile.
A member of the liberal-conservative National Renewal party, he served as a senator for the East Santiago district from 1990 to 1998, running for the presidency in the 2005 election, which he lost to Michelle Bachelet, and again, successfully, in 2010. As a result, he became Chile's first conservative president to be democratically elected since 1958, and the first to hold the office since the departure of Augusto Pinochet in 1990.
Domingo Felipe Cavallo (born July 21, 1946) is an Argentine economist and politician. Between 1991 and 1996, he was the Minister of Economy during Carlos Menem's presidency. He is known for implementing the convertibility plan, which established a pseudo-currency board with the United States dollar and allowed the dollar to be used for legal contracts. This brought the inflation rate down from over 1,300% in 1990 to less than 20% in 1992 and nearly to zero during the rest of the 1990s. He implemented pro-market reforms which included privatizations of state enterprises. Productivity per hour worked during his five-years as minister of Menem increased by more than 100%. In 2001, he was the economy minister for nine months during the 1998–2002 Argentine great depression. During a bank run, he implemented a restriction on cash withdrawing, known as corralito. This was followed by the December 2001 riots in Argentina and the fall of Fernando de la Rúa as president.
Cavallo is a Doctor in Economic Sciences from the National University of Córdoba and obtained his PhD in Economics from Harvard University. He received five Honoris Causa doctorates from Genoa, Turin, Bologna, Ben-Gurion and Paris Pantheon-Sorbonne universities. He was professor at the National and Catholic Universities of Córdoba, and at New York, Harvard, and Yale universities.
Economic Matters - The podcast is hosted by Laurence Kotlikoff and moderated by Alex Kotlikoff.