On the Political Economy of Monetary Policy Saul Keifman

[Working Paper No. 01/2008] Little progress has been made so far in understanding the causes of Argentina's worst socio-economic crisis. This paper analyzes the intellectual roots of Argentine convertibility as a small contribution to this necessary and pending discussion. The country implemented a radical monetary reform, technically known as a currency board, although its popular name was "Convertibility", allegedly launched to impose fiscal discipline and gain credibility. This paper argues that it is very important to understand that Argentina's problems with the currency board stem from major flaws in its underlying theoretical model, which is based on the assumptions of…

Why Argentina Crashed, and is Crashing Eric Hershberg

The catastrophic collapse of the Argentine economy during the second half of 2001, and its accelerating decline during the first half of 2002, has created hardships of a scale and scope that fully justify concluding that the country is undergoing a "Second Great Depression." On the heels of four years of recession Argentina's default on its $140 billion national debt triggered an economic contraction of more than 15% during the first six months of 2002. Unemployment has skyrocketed to encompass a quarter of working age Argentines, and the poverty rate in what was once Latin America's most prosperous republic has…

Why Argentina Crashed, and is Crashing Eric Hershberg [Social Science Research Council]

The catastrophic collapse of the Argentine economy during the second half of 2001, and its accelerating decline during the first half of 2002, has created hardships of a scale and scope that fully justify concluding that the country is undergoing a "Second Great Depression." On the heels of four years of recession Argentina's default on its $140 billion national debt triggered an economic contraction of more than 15% during the first six months of 2002. Unemployment has skyrocketed to encompass a quarter of working age Argentines, and the poverty rate in what was once Latin America's most prosperous republic has…

Confronting the IMF – Argentina’s Road to Recovery Tom Gill

"For many years in Argentina," declared Eduardo Duhalde as he assumed the presidency on January 1, "they have made us believe that amid this new world order, there is only one possible economic model. This is a complete falsehood." Argentinians, who once lived in a country as rich as France, will be hoping he is right. These days, after two-and-half-decades of IMF-backed free-market reforms, more than 40% of the 38m population live below the poverty line and 100 children die daily from hunger and disease. As a leading member of the Peronist party, which under Carlos Menem brought Argentina to…