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Are Brazil and Argentina Heading Toward a Tragedy of the Monetary Commons?

February 6, 2023

Earlier this month, Argentina and Brazil announced that they would begin working to implement a common currency. The news shocked many economists, including Oliver Blanchard, former chief economist of the International Monetary Fund. Blanchard responded by tweeting: “This Is Insane.”

While neither country has a good track record in monetary affairs, the potential problems created by a common currency area are not immediately evident to many people.