The Argentinian Peso Crisis (2014) (original) (raw)

Currency Crises in Argentina An empirical Investigation

2004

This paper is aimed at studying the determinants of currency crises suffered by Argentina from 1885 to 2003, on one hand, and at characterizing each particular currency crisis, on the other hand. Firstly, we look for regularities and common factors throughout history. We split the dataset in crises and non-crises years and carried out graphical analysis in order to analyze the behavior of key macroeconomic variables in the neighborhood of currency crises. We complemented it by estimating a logit model including a set of variables chosen from the prescriptions of the existing currency crises theories. Secondly, following Kaminsky (2003) we perform regression tree analysis to classify crises and crashes into different varieties proposed by the theories at stake. We use fifteen financial and macroeconomic variables suggested by the empirical literature. It is found that fiscal imbalances were always present, which is consistent with the predictions of first generation speculative attac...

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...

Crises and Crashes: Argentina 1825-2002

Revista de Historia Económica / Journal of Iberian and Latin American Economic History, 2013

ABSTRACTThe objective of this paper is twofold. First, it identifies and categorizes the currency crises suffered by Argentina from 1825 to 2002. Second, it looks for regularities in the behaviour of key macroeconomic variables in the neighbourhood of crises by means of graphic analysis, non-parametric and econometric techniques. We found that expansions in public expenditures as well as increases in the debt to GDP ratio and falls in the rate of growth of bank deposits contribute to spur the probability of crisis. Unfavourable external conditions, jointly with domestic imbalances, help to explain very deep crises or crashes.

An Early Warning System for currency crises in Argentina and Brazil 1990-2009

EconoQuantum, 2018

The Global Financial Crisis (GFC) has affected many regions including Latin America. This paper focuses on currency crises in Argentina and Brazil, the two largest economies in South America, and with a wide experience with currency crises. We estimate an Early Warning System, consisting of a static factor model and a multinomial ordered logit model, with monthly data for 1990-2007. Ex ante forecasts for 2008-2009 produce an increased probability of currency crises in the fall of 2008.Our model outcomes confirm that elements from earlier crises are useful to predict the currency crises during the GFC.

CRISES & CRASHES: ARGENTINA 1885 – 2003

Journal of Iberian and Latin American Economic History /Revista de Historia Económica, 2013

The objective of this paper is twofold. First, it identifies and categorizes the currency crises suffered by Argentina from 1825 to 2002. Second, it looks for regularities in the behaviour of key macroeconomic variables in the neighbourhood of crises by means of graphic analysis, non-parametric and econometric techniques. We found that expansions in public expenditures as well as increases in the debt to GDP ratio and falls in the rate of growth of bank deposits contribute to spur the probability of crisis. Unfavourable external conditions, jointly with domestic imbalances, help to explain very deep crises or crashes.