Seeking stability: Exploring dollarization as an option for Argentina's development

Argentina has struggled with inflation since the 1940s, with rates increasing over time and no successful attempts to eliminate it. Despite this, Argentinian society has grown accustomed to high, long-lasting, and volatile inflation, hindering economic growth and development. Numerous stabilization plans have failed, and all monetary policy schemes have been exhausted, except for dollarization. The study aims to describe the different stabilization alternatives that Argentina has used to combat inflation and discuss the possibility of dollarizing the economy as a solution to the inflationary problem. Many neighboring countries have made this decision and their economies have stabilized. The methodology includes both a qualitative approach and a quantitative approach. In its first stage, an attempt will be made to approximate the object through its description, while in the second stage, Bayesian networks will be used. The idea is to analyze the influence of macroeconomic variables in the inflationary phenomenon in Argentina to try to propose a correct decision that stabilizes the economy in the long term. The preliminary research findings show that the inflationary phenomenon in Argentina is multi-causal and, although printing money is the main component, variables such as the interest rate, the exchange rate, the fiscal deficit, and expectations, among others, influence inflation. With annual inflation at 95% in 2022 and projected to exceed 100% in 2023, alternative solutions must be considered. This article is a preview of a Ph.D. thesis in economics in Argentina.