Javier Milei published an extensive account of his monetary policy and explained the inflationary phenomenon.

In a lengthy publication from the Office of the President , Javier Milei supplemented the national broadcast broadcast Friday night with economic theory. The president attempted to explain why the recent rise in the dollar would not impact inflation and highlighted the importance of monetary policy as a root cause of rising prices.

" Beyond the fact that most analysts were wrong in their forecasts, what is surprising is the persistence of the same analytical errors that keep these professionals on a negative streak, even before the change of government ," the president emphasized in the introduction to the text, which included references and quotes from various economists belonging to the "Austrian School" of economics.

At the beginning of the article, Milei noted that since mid-April, " the monetary debate in Argentina has been based on how the dollar should behave and how it translates into prices when it rises ." For the president, this statement " is false and implies a profound lack of knowledge of monetary theory " on the part of analysts.

Milei then explained the origin of money as a way to overcome the limitations of a barter economy. The president defined money as "a good that serves only to carry out transactions, whether present through transactional demand, or future, through hoarding." " Therefore, we understand that the demand for money is a demand derived from the total demand for goods and services in the economy," he summarized.

After this segment, the head of state reiterated the Milton Friedman quote he has used on numerous occasions: "Inflation is always and everywhere a monetary phenomenon, generated by an excess supply of money, which leads to a loss of the purchasing power of money."

In this regard, Milei referred to the " Hume-Cantillon effect ," which states that stabilizing and eliminating inflation requires patience, given a lag time of 18 to 24 months. He also ruled out the possibility that the rise in the price of the dollar would affect inflation, since it would be primarily linked to the money supply.

Finally, he quoted economist Carl Menger and reiterated: "For inflation to exist, monetary validation by the Central Bank is necessary. Otherwise, the price level would not change, and everything would be a matter of relative prices."

ESSENTIAL ASPECTS OF MONETARY ANALYSISBy President Javier Gerardo Milei.1. Introduction

Since mid-April, when the foreign exchange market was liberalized, the monetary debate in Argentina has focused on how the dollar and the…