Argentina's Pathway Through Financial Crisis (original) (raw)
Related papers
Financial and Political Crisis in Argentina: Walking a Wobbly Tightrope
2002
, two months and five presidents have come and gone with no political stability in sight for Argentina. Argentina touted itself as the United States' closest ally in Latin America during the 1990s, closely following the U.S. lead in world affairs. It also was one of the strongest advocates in Latin America of U.S.-and IMF (International Monetary Fund)-sponsored neoliberal economic policies. Argentina's support for U.S. foreign policy objectives was rewarded with increased U.S. diplomatic and military recognition and billions of dollars in foreign investment during the 1990s. A bitter four-year recession, however, led to increasing popular protests against the government of President Fernando de la Rua, who was forced to step down this past December, halfway through his four-year presidential term. An interim president, Adolfo Rodriguez Saa, resigned after a week in the face of continuing protests, and Eduardo Duhalde, one of the leaders of the opposition Peronist party, has stepped into the presidency-for the moment. (The other two presidents were place-holders drawn from the leadership of the Argentine congress. Each held the title for no more than a day or two.
Revisiting the Argentine Crisis a Decade on: Changes and Continuities
Argentina Since the 2001 Crisis: Recovering the Past, Reclaiming the Future, 2014
This book chapter is the Introduction to the book Argentina since the 2001 Crisis: Recovering the Past, Reclaiming the Future. It analyses the nature and effects of the 2001 crisis in Argentina, setting the scene for the discussion of the legacies of crisis that follow in successive chapters. First, it seeks to reject false dichotomies of 'old' and 'new'; instead synthesising them in order to incorporate both elements of continuity and elements of change into analysis. We assert that responses to crisis do not only involve the merging of old and new, but that they are also, concurrently, responses to both old and new problems – many of which were evident in the 1990s and before. Second, it recognises that crisis manifests itself in a number of realms – political, economic, social – and that heuristic devices employed to investigate them must subsequently also be drawn from a number of academic disciplines. This second point is in recognition of the fact that models of political economy, by their very nature and definition, come to encompass all aspects of social life and social reproduction. Link to full chapter can be found below
Cato Journal, 2003
The Argentine economy suffered a deep crisis during 2001 and 2002. Poverty stretched to one in every three homesteads in the suburbs of Buenos Aires, and the traumatic departure from convertibility, together with financial crisis and default (public debt default), undermined investor confidence, both local and foreign. Causes of the Crisis We believe the crisis owed its existence to four main causes: (1) inappropriate fiscal policy, (2) wage and price rigidities inconsistent with a fixed exchange regime, (3) a considerable, adverse external shock, and (4) political turmoil. Two-Tiered Fiscal Inconsistency On one side, public expenditure growth measured in U.S. dollars outpaced GDP growth, corrected by tradable-goods prices. On the other, the federal and provincial primary fiscal surplus did not rise at an equal pace with the hike in the financial burden linked to growing debt and the gradual phasing out of preferential-rate bonds (Brady bonds and others issued to cancel government l...
Political Economy in Argentina: The 2002 default-causes and remarks.
the currency board. 12 2.1. What a currency board is. 12 2.2. Evaluating a currency board. 17 2.3. The currency board in Argentina. 20 3. The events which lead to the 2001 crisis. 24 3.1. 1994: the "tequila crisis". 24 3.2. The late 90's: the depreciation of Real. 27 3.3. Menem's proposal: dollarization. 28 3.4. The excessive vulnerability to external shocks. 32 3.5. 1999-2001: De La Rua's attempt to stop the crisis. 35 4. Concluding remarks. 38 References 43 left wing peronism. The nomenclature "peronism" is just a populist term to attract the masses and win the election. 1.1. From the end of WWII to 1983.
Ensayos de Economía 60, 2022
This article describes the Argentinean experience during the first two decades of the 21 st century. After a successful recovery phase from the 2001 debt crisis, during 2011 Argentina adopted incorrect macroeconomic policies to avoid the contractionary and inflationary effects from a large depreciation of the currency, by implementing a strict system of restrictions on foreign exchange purchase and sale. The restrictions were lifted 4 years after their implementation, and during 2016-2017 Argentina drew heavily from international capital markets until the country suffered a sudden stop of capital flows. Resumen Este artículo describe la experiencia argentina durante las dos primeras décadas del siglo XXI. Luego de una recuperación exitosa de la crisis de 2001, a partir del año 2011 Argentina adoptó una política macroeconómica incorrecta, implementando un esquema de restricciones a la compra - venta de divisas. Cuatro años luego de introducidas, las restricciones fueron levantadas, y durante 2016-2017 Argentina retornó a los mercados financieros internacionales, hasta que el país sufrió de un freno a los ingresos de capitales.
An Analysis of the 2002 Argentine Currency Crisis ∗
2006
In 1991 the Argentine Government embarked on an ambitious exchange rate based stabilization (ERBS) program aimed at removing the enticement of using money creation to finance the pervasive fiscal imbalances that have been a feature of the Argentine economic landscape. Despite the strait-jacket of this program and the early successes achieved, within a decade of its implementation the program collapsed and resulted in the largest debt default in history. This paper analyzes the circumstances leading up to the failure of Argentina’s experiment with this currency board arrangement and the ensuing currency crisis of 2002. In doing so, the paper places this particular episode of exchange rate crisis into the broader context of the three generations of currency crisis models under consideration in the literature. It will be argued that the mixture of unsustainable debt dynamics, an overvalued real exchange rate coupled with labor market rigidities, and the moral hazard presented by the la...