The Peter McCormack Show

#143 – Emmanuel Maggiori – The Economics of State Failure

7 snips
Feb 5, 2026
Emmanuel Maggiori, economist who lived through Argentina’s inflation and institutional decay, shares sharp observations on monetary policy, black markets and why inflation erodes trust before prices. He covers MMT’s political risks, dollarization and dollar/Bitcoin as flight options. They also dig into corruption, shrinking opportunity and how societies slowly drift into dysfunction.
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INSIGHT

Inflation Imposes Hidden Transaction Costs

  • Inflation imposes large hidden transaction costs and wasted effort (shoe‑leather costs).
  • Maggiori reports Argentinians spent time chasing foreign currency and queuing, which harms productivity.
ANECDOTE

2001 Bank Runs Left Scars

  • Emmanuel recalls the 2001 Argentine bank runs and deposit freezes that left families ruined and presidents resigning.
  • He describes vivid memories of protests and household losses from dollar‑denominated debts.
INSIGHT

MMT’s Theory Clashes With Political Reality

  • MMT rests on technically true premises but ignores political economy and practical constraints.
  • Maggiori argues MMT underestimates slack, supply bottlenecks, and persistent incentives to keep printing.
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