Growth Diagnostics for Argentina.PDF

Growth Diagnostics for Argentina Omar O. Chisari Eduardo A. Corso José María Fanelli Carlos A. Romero CEDES October 31, 2007 Introduction In the last four years Argentina has experienced a substantial acceleration in growth. Despite this, many problems remain. Some have been inherited from the past and others arose because of policy inconsistencies. In this context, a number of policy questions arise. What should be done to address the imbalances without jeopardizing the recently ignited growth process? What constraints should be addressed first? The main purpose of this paper is to evaluate the current growth process and contribute to answering these policy questions. The paper presents the main arguments of a Project sponsored by the IDB. For further details, see the Final Report of the project. The study is organized on the basis of the growth-diagnostics methodology (GDM). This methodology was first proposed by Hausmann, Rodrik, and Velasco (2005) and there have been other contributions afterwards (see WB, 2005, Dixit, 2005, Zagha et al., 2006). The most important goal of the GDM is to identify what growth constraints should be addressed first so as to induce the largest positive direct effect on gr