Forbes
October 24, 2011
Yes, we know that Greece is going to have to default. Yes, Argentina isn’t a bad model to use to point to the beneficial effects of such a default. If the country is bust then default is indeed a sensible option. However, it’s possible to overdo the joys and benefits of such default. Here’s an example from Mark Weisbrot, writing in the Guardian.
For the years 2002-2011, using the IMF‘s projections for the end of this year, Argentina has chalked up real GDP growth of about 94%.
Well, yes, those are the reported figures. However, they’re not the correct figures because we know that the Argentine government has been lying.
In order to get real GDP growth figures you collect the nominal GDP figures (fairly easy) and then adjust them by the inflation rate. That’s, all in all, a fairly simple task if you have reliable figures for nominal GDP and for the inflation rate.
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