Argentina06

Argentina06 - Argentina March 2006 Maria Muniagurria...

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Argentina March 2006 Maria Muniagurria
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Argentina Some History Rich Natural Resources High Human Capital Reasonable Infrastructure Great Performer in early 1900’s. Closed economy/populist policies 1945-55 Fiscal Problems, High Inflation, Macro Instability 70-80’s
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Reforms in the 90’s Opening, Privatization, Financial Reform Currency Board (Convertibility Law 1991) Fixed Peso/US dollar exchange rate Pesos issued had to be backed by dollar reserves (fiscal discipline) Results: End of Inflation Great Performance 90-98
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1999-2001 Deterioration and Crisis: What Went Wrong? Combination: - External Shocks - Peso overvaluation relative to currencies of largest trading partners (from external shocks+currency board) - Fiscal dynamics (too weak during upswing, problem of provincial budgets, political issues) - Debt dynamics (unsustainable nature was not addressed - Self Fulfillment Pessimism?
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External Shocks Mexico Crisis 1995 (Argentina recovered)
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This note was uploaded on 08/08/2008 for the course ECON 365 taught by Professor Muniagurria during the Spring '07 term at Wisconsin.

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Argentina06 - Argentina March 2006 Maria Muniagurria...

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