Front-Loaded Stabilizations: Lessons From Milei's Chainsaw Reform Program

Abstract

The literature on delayed stabilization has built its analytical framework on the premise that stabilization entails costs. We argue that this premise is incorrect: Stabilization and economic reform deliver benefits rather than costs. If so, reforms should be front-loaded rather than delayed. We use the case of President Milei's radical “chainsaw” reform program to illustrate such a front-loading approach in action. We argue that the case suggests the need to substantially reformulate the literature on economic reform and delayed stabilization.