Analyzing recent price anomalies in Argentina: Global influences and domestic distortions

This study investigates Argentina’s unusually high and persistent goods inflation in the aftermath of the COVID-19 pandemic, using a cross-country monthly panel and a model that decomposes inflation into observable marginal costs, global price pass-through, and changing markups. We find that, at their peak in January 2024, goods price markups were approximately 40% higher than in November 2011. Further analysis indicates that these elevated markups were primarily driven by distortionary policy interventions—particularly foreign exchange controls, non-tariff barriers, and complex import regulations—which disrupted market pricing mechanisms and significantly amplified inflation, positioning Argentina as a clear outlier in the global inflation cycle.