The role of oligopolies and economic groups in accelerating inflation in recent Argentina

This article seeks to contribute to the analysis of non-monetary aspects of inflation, focusing on the price escalation in 2021–2022, when the pace of inflation accelerated in the Argentine economy. The article examines the impact of market concentration and corporate conglomeration strategy on the variation in relative prices or, according to the Latin-American structuralist view, on the “downward stickiness” of prices following the international shock that resulted in a significant increase in corporate profit margins. Against the backdrop of the “high inflation” phase that the Argentine economy is facing due to both the international price shock in the aftermath of the pandemic and to the war in Ukraine, the contribution of this research is to show that oligopolistic branches operating in the manufacturing sector have opened the way to the acceleration in prices. The most significant increases can be observed in highly concentrated branches in which local economic groups or foreign conglomerates are clearly predominant. This, among other possible factors, has allowed those branches to increase their profit margins as their prices rose in excess of the prices of imported inputs and the rest of wholesale prices, and of their wage costs. This evidence not only connects with the international debate about the characteristics of inflationary processes in core countries but it is also a contribution, albeit a preliminary one, that addresses the stickiness of the Argentine economy when it comes to decelerating the rise in prices after an “initial impetus”.