Convertibility plan
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The Convertibility plan was a plan by the Argentine Currency Board that pegged the Argentine peso to the
U.S. dollar The United States dollar (symbol: $; currency code: USD) is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it int ...
between 1991 and 2002 in an attempt to eliminate
hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real versus nominal value (economics), real value of the local currency, as the prices of all goods increase. This causes people to minimiz ...
and stimulate
economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
. While it initially met with considerable success, the board's actions ultimately failed. The peso was only pegged to the dollar until 2002.


Background

For most of the period between 1975 and 1990, Argentina experienced hyperinflation (averaging 325% a year), poor or negative
GDP Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performance o ...
growth, a severe lack of confidence in the national government and the
Central Bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
, and low levels of
capital Capital and its variations may refer to: Common uses * Capital city, a municipality of primary status ** Capital region, a metropolitan region containing the capital ** List of national capitals * Capital letter, an upper-case letter Econom ...
investment Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...
. After eight currency crises since the early 1970s,
inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
peaked in 1989, reaching 5,000% that year. GDP was 10% lower than in 1980 and per capita GDP had fallen by over 20%.
Fixed investment Fixed investment in economics is the purchase of newly produced physical asset, or, fixed capital. It is measured as a flow variable – that is, as an amount per unit of time. Thus, fixed investment is the sum of physical assets such as machin ...
fell by over half and, by 1989, could not cover yearly
depreciation In accountancy, depreciation refers to two aspects of the same concept: first, an actual reduction in the fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wears, and second, the allocation i ...
- particularly in the industrial sector. Social indicators deteriorated seriously: real wages collapsed to about half of their 1974 peak and income poverty rates increased from 27% in 1980 to 47% in 1989.''Argentina: From Insolvency to Growth.'' The World Bank Press, 1993. To a large extent, the main reason behind this long period of hyperinflation was un
sustainable growth Sustainable development is an approach to growth and human development that aims to meet the needs of the present without compromising the ability of future generations to meet their own needs.United Nations General Assembly (1987)''Report of th ...
of the
money supply In macroeconomics, money supply (or money stock) refers to the total volume of money held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circulation (i ...
to finance the large fiscal deficits maintained by successive governments. Driven by rising tax evasion and losses among
state enterprise A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goo ...
s, the total public
fiscal deficit The government budget balance, also referred to as the general government balance, public budget balance, or public fiscal balance, is the difference between government revenues and spending. For a government that uses accrual accounting ( ...
reached 10% of GDP in 1983. Austerity measures pursued by President
Raúl Alfonsín Raúl Ricardo Alfonsín (; 12 March 1927 – 31 March 2009) was an Argentine lawyer and statesman who served as President of Argentina from 10 December 1983 to 8 July 1989. He was the first democratically elected president after the 7-yea ...
trimmed this 4% in 1985, though the 1989 crisis pushed the shortfall to 7.6% (which could only be financed by suspending debt interest payments). Since Argentina could not participate meaningfully in world capital markets given the great investment risk it posed, the only course available was the financing of these fiscal deficits by monetizing them. This meant that the government levied an
inflation tax Seigniorage , also spelled seignorage or seigneurage (), is the increase in the value of money due to money creation minus the cost of producing the additional money. Monetary seigniorage is where government bonds are exchanged for newly created ...
to pay for the fiscal deficits, which in turn contributed to stalling growth. Another reason for the instability of the Argentine currency was the fragility of domestic financial institutions. The Argentine banking crisis of 1990 underlined this point, as the Central Bank moved to confiscate the deposits of commercial banks with the BONEX plan, to overcome a
liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quic ...
crunch by exchanging certain types of
time deposit A time deposit or term deposit (also known as a certificate of deposit in the United States, and as a guaranteed investment certificate in Canada) is a deposit in a financial institution with a specific maturity date or a period to maturity, c ...
s for BONEX bonds. Tightening domestic credit became increasingly limited to the public sector: only US$17 billion of loans outstanding (45% of the total) were accounted for by private sector borrowers, and this declined to US$7 billion during the 1989 crisis. Accordingly, the nation's money supply ( M2) fell by nearly identical figures, while affluent Argentine nationals held over US$50 billion overseas. There were also external factors that further triggered the
currency crisis A currency crisis is a type of financial crisis, and is often associated with a real economic crisis. A currency crisis raises the probability of a banking crisis or a default crisis. During a currency crisis the value of foreign denominated deb ...
, such as
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...
fluctuations. In the early 1980s, for example, the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
imposed tight monetary discipline upon its own institutions, which made it more expensive to borrow money because banks were required to keep higher
reserve requirement Reserve requirements are central bank regulations that set the minimum amount that a commercial bank must hold in liquid assets. This minimum amount, commonly referred to as the Bank reserves, commercial bank's reserve, is generally determined ...
s. Erratic or punitive responses to global financial vagaries by the
Central Bank of Argentina The Central Bank of the Argentine Republic (, BCRA) is the central bank of Argentina, being an autarchic entity. Article 3 of the Organic Charter lists the objectives of this Institution: “The bank aims to promote, to the extent of its powers ...
itself often left the
Argentine economy The economy of Argentina is the second-largest national economy in South America, behind Brazil. Argentina has a human Development Index classified as "very high" by the United Nations, with a highly literate population, an export-oriented Agricult ...
bearing the brunt. One particularly damaging austerity policy was the Central Bank Circular 1050. Enacted in 1980, it tied monthly installment payments to the value of the U.S dollar in Argentina, which rose over ten-fold between early 1981 and July 1982, when new Central Bank President
Domingo Cavallo Domingo Felipe Cavallo (born July 21, 1946) is an Argentine economist and politician. Between 1991 and 1996, he was the Minister of Economy during Carlos Menem's presidency. He is known for implementing the convertibility plan, which establis ...
rescinded the surcharge (by then, commercial banks had been writing off 5% of their loan portfolio a month). The debacle shattered credit market confidence locally for the rest of the 1980s, directly contributing to the negative economic climate in Argentina during those years.
Carlos Menem Carlos Saúl Menem (2 July 1930 – 14 February 2021) served as the 50th president of Argentina for ten years, from 1989 to 1999. He identified as Peronism, Peronist, serving as President of the Justicialist Party for 13 years (from 1990 to 200 ...
took office six months in advance. His early attempts to stabilize inflation failed, resulting in further
depreciation In accountancy, depreciation refers to two aspects of the same concept: first, an actual reduction in the fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wears, and second, the allocation i ...
of the austral and a serious reduction in the Central Bank's
foreign currency reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold and silver held by a central bank or other monetary authority that are primarily available to balance payments of the country, ...
. In April 1991, Menem reverted the country's policies according to ideas of
Washington Consensus The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
to what was later to be called economic
neoliberalism Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pe ...
. This system involved a program of massive
privatization Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation w ...
and labor
deregulation Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...
laws, which encouraged foreign investment and infused the country with cash to finance its fiscal deficits. However, the linchpin of the new system was the introduction of the
Convertibility Convertibility is the quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must ...
System. At the time, there was much debate in Argentina and abroad about how to control inflation and build confidence in local currencies in order to foster investment and growth. There were three options of exchange rate management available to any government: a
floating exchange rate In macroeconomics and economic policy, a floating exchange rate (also known as a fluctuating or flexible exchange rate) is a type of exchange rate regime in which a currency's value is allowed to fluctuate in response to foreign exchange market ...
, a super-
fixed exchange rate A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a currency basket, basket of other currenc ...
(including the possible use of a
currency board In public finance, a currency board is a mechanism by which a monetary authority is required to maintain a fixed exchange rate with a foreign currency by fully backing the commitment with foreign holdings, or reserves. This policy objective requ ...
), or a hybrid system (otherwise known as a soft-peg) such as that which Mexico undertook. The hybrid system consisted of various levels of control over exchange rates, and it was discredited in the early 1990s when empirical evidence from several currency crises showed that, in a world of high capital mobility, a semi-fixed exchange rate was very unstable, because it allowed a country with poor monetary policy to exercise too much discretionary power. The consequence was that a government had to choose between either fixed or fully floating exchange rate systems. Before the implementation of the currency board there was much debate over which currency or currencies to peg the peso against. In the view of many economists, the peso should have been pegged to a
basket of currencies A currency basket is a portfolio of selected currencies with different weightings. A currency basket is commonly used by investors to minimize the risk of currency fluctuations and also governments when setting the market value of a country's ...
from the countries that were Argentina's major trading partners. Others argued that the peso should be pegged to the U.S. dollar because it would provide simplicity of understanding, the highest degree of safety, greater international credibility, and the promise of increased trade with the United States. The latter argument won the day, with both positive and negative consequences. Argentina's currency board established a fixed pegging of one-to-one parity between the peso and the U.S. dollar. It also guaranteed full convertibility of pesos into U.S. dollars. The government hoped to establish local and international credibility in the peg and to limit the amount of local control over monetary and fiscal policy. The currency board regime intended to stabilize the peso, encourage both foreign and local investment, and foster sustained economic growth.


Flaws in implementation

The main qualities of an orthodox currency board are: *A currency board maintains absolute, unlimited
convertibility Convertibility is the quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must ...
between its notes and coins and the currency against which they are pegged, at a fixed rate of exchange, with no restrictions on current-account or capital-account transactions. *A currency board's foreign currency reserves must be sufficient to ensure that all holders of its notes and coins can convert them into the
reserve currency A reserve currency is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international transactions, internat ...
(usually 110–115%). * A currency board only earns
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
from interest on reserves (less the expense of note-issuing), and does not engage in forward-exchange transactions. * A currency board has no discretionary powers to affect monetary policy and does not lend to the government. Governments cannot print money, and can only
tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...
or borrow to meet their spending commitments. *A currency board does not act as a
lender of last resort In public finance, a lender of last resort (LOLR) is a financial entity, generally a central bank, that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank ...
to commercial banks, and does not regulate
reserve requirement Reserve requirements are central bank regulations that set the minimum amount that a commercial bank must hold in liquid assets. This minimum amount, commonly referred to as the Bank reserves, commercial bank's reserve, is generally determined ...
s. * A currency board does not attempt to manipulate
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...
s by establishing a discount rate like a
central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
. The peg with the foreign currency tends to keep interest rates and inflation very closely aligned to those in the country against whose currency the peg is fixed. The Argentine currency board violated all these rules at one time or another, except that of a fixed exchange rate. Full convertibility with the U.S. dollar became jeopardized upon implementation of exchange rate controls that provided a preferential exchange rate for
export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...
s. The currency board was allowed to hold up to one-third of its dollar-denominated reserves in the form of bonds issued by the government of Argentina. It acted as lender of last resort and regulated reserve requirements for commercial banks. And it engaged in monetary policy activities. The impact of all this was to reduce the credibility of the Argentine government's intent, and to put speculative pressure on the peso, despite the peg.


Results of the currency board

Argentina implemented its currency board in April 1991. Its main achievement was in controlling inflation, which was brought down from more than 3,000% in 1989 to 3.4% in 1994. Another major accomplishment of the system was renewed economic growth. Enjoying the high world prices of primary products (Argentina's main exports), GDP grew at an annual rate of 8% between 1991 until the Tequila Effect of 1995. Even after the Mexican crisis, until 1998 the annual growth rate was 6%.
International trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (See: World economy.) In most countries, such trade represents a significan ...
also increased dramatically, reflecting the growing degree of openness of the country. Imports increased from US$11.6 billion in 1991 to US$32.3 billion in 2000. Likewise, exports also increased from US$12.1 billion in 1991 to US$30.7 billion in 2000. Despite these impressive results, side effects on social issues included increased
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is the proportion of people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work du ...
, unequal
income distribution In economics, income distribution covers how a country's total GDP is distributed amongst its population. Economic theory and economic policy have long seen income and its distribution as a central concern. Unequal distribution of income causes e ...
and decreased
wage A wage is payment made by an employer to an employee for work (human activity), work done in a specific period of time. Some examples of wage payments include wiktionary:compensatory, compensatory payments such as ''minimum wage'', ''prevailin ...
s. Unemployment increased from 6.1% in 1991 to 15% in 2000 as the fixed exchange rate increased foreign price competition and forced local firms to invest in more advanced technologies that required less
labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the labour ...
and higher
productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proce ...
. Income inequality increased: the bottom 20% of the population decreased its share of national income from 4.6% in 1991 to 4.1% in 2000, while the top 20% of the population increased its share from 50.4% to 51.4%. Initially, the poverty rate declined as hyperinflation receded, reaching 17% by 1993 (implying that the inflation tax was primarily absorbed by low-income households), but after the Mexican crisis the trend reversed. Although overall wages increased, they did not benefit all workers equally. Skilled and unskilled workers lost ground compared to managerial and professional income groups. Government debt increased sharply. Unwilling or unable to raise taxes, and precluded from printing money by the currency board system, the government's only other recourse to finance its budget deficit was to issue debt instruments in the capital markets. Public debt increased sharply from 29.5% of GDP in 1993 to 50.3% in 1999. Moreover, this debt was in foreign currency, since the domestic private savings remained low, and it took place despite large inflows of income from the privatization of formerly state-owned companies. Associated with the increase in public debt was an increase in the
debt service ratio In economics and government finance, a country’s debt service ratio is the ratio of its debt service payments (principal + interest) to its export earnings.Glossary of Statistical TermsDebt service ratio OECD, Sep 25, 2001. A country's internation ...
, which increased from 22% of exports in 1993 to 35.2% in 1999, exacerbating an increasing current account deficit. Part of President Menem's program included large-scale privatization of state-owned companies. Unfortunately, because of the fixed exchange rate, privatization agreements generally linked price increase flexibility to the rate of U.S. inflation, which was often higher than that in Argentina. The relative prices of public utilities thus increased and shifted wealth from the state to the privatized firms which, without any exchange control restraints, were free to expatriate these windfalls and invest them elsewhere. External shocks also affected the Argentine currency board. The first was the Mexican crisis of 1994–1995, resulting in a liquidity crunch that drove interest rates sharply higher, stalling growth and spurring unemployment. In quick succession, the ensuing 1997 Asian and 1998 Russian financial crises pounded at the economy by further increasing interest rates as foreign investors became much warier of where they invested their assets, continuing to keep the cost of borrowing high for Argentina. The Brazilian crisis of 1999 probably had the most severe effect, because Brazil is Argentina's largest trading partner, and the crisis was coupled with an appreciating U.S. dollar and a slump in the world prices of primary products. Argentina's competitiveness in world markets was severely hit, given the peso's link to the appreciating U.S. dollar and weakening demand in its northern trading partner. As a result, the economy stalled and subsequently contracted. These ongoing crises and the strong U.S. dollar in the late 1990s put the spotlight on the decision to peg the peso to the U.S. dollar rather than to a basket of currencies that were better aligned with its trade patterns. While Argentina was mostly trading with countries (Europe and Brazil) that did not have the U.S. dollar as their currency, the peso was fluctuating according to the U.S. dollar and not according to Argentina's actual economic position (this is known as the " third currency phenomenon"). Simply put, the dollar peg overvalued the peso in the rest of the world, especially against a weak
euro The euro (currency symbol, symbol: euro sign, €; ISO 4217, currency code: EUR) is the official currency of 20 of the Member state of the European Union, member states of the European Union. This group of states is officially known as the ...
and the
Brazilian real The Brazilian real (plural, pl. '; currency symbol, sign: R$; ISO 4217, code: BRL) is the official currency of Brazil. It is subdivided into 100 centavos. The Central Bank of Brazil is the central bank and the issuing authority. The real repl ...
, reducing Argentina's competitiveness and compounding the account deficit.


Abandonment of the peg

During the second half of 2001, the pressure mounted on the currency board but there was no clear way out. Since most of country's debt was denominated in U.S. dollars, there would be a huge cost to breaking the peg, not to mention the long-term damage to Argentina's credibility in world capital markets. On the other hand, allowing the market to determine the exchange rate would radically improve competitiveness and eliminate the current account deficit along with the need to borrow money to finance it. Many solutions were considered, including changing the peg to a currency basket of U.S. dollars and euros (which would have entailed an effective and controlled
devaluation In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national curre ...
of the peso), and dollarization (using U.S. dollars as the country's only currency). On December 3, 2001, the minister
Domingo Cavallo Domingo Felipe Cavallo (born July 21, 1946) is an Argentine economist and politician. Between 1991 and 1996, he was the Minister of Economy during Carlos Menem's presidency. He is known for implementing the convertibility plan, which establis ...
restricted bank deposit withdrawals to a maximum of 1000 pesos/dollars per month until 3 March 2002. This was popularly known as
Corralito Corralito () is the informal name for the economic measures taken in Argentina at the end of 2001 by Minister of Economy Domingo Cavallo in order to stop a bank run which implicated a limit of cash withdrawals of 250 ARS per week (at that ti ...
. The effect of the Corralito was so unpopular that president de la Rúa and Cavallo had to resign. First Ramón Puerta took the presidency, followed by Rodríguez Sáa two days later. In the week he was in charge, Argentina suspended payments on its external debt. In January 2002, the new president Eduardo Duhalde ordered his finance minister Jorge Remes Lenicov to repeal the Convertibility Law and adopt a new, provisional fixed exchange rate of 1.4 pesos to the dollar (a 29% devaluation) and the conversion of all the bank accounts denominated in dollars into pesos and its transformation in bonds ("Corralon"); soon afterward it completely abandoned its peg and allowed the peso to float freely, resulting in a swift
depreciation In accountancy, depreciation refers to two aspects of the same concept: first, an actual reduction in the fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wears, and second, the allocation i ...
of the peso, which lost 75% of its value with respect to the U.S. dollar in a matter of months, stabilizing at a rate of 2.9 pesos per dollar by 2003. The reason of this incredible depreciation of the peso was not the economic crisis or the overvaluation, it was the "pesification" of all the accounts. As a consequence of the pesification of every account in Argentina, the 100 billion dollars that were in the banks were changed to 100 billion pesos. This caused an enormous demand for dollars and transformed the normal change of 1.40 pesos per dollar to 4 pesos per dollar in 5 months.


Sources

* Baer, Werner, Elosegui, Pedro & Gallo, Andrés. (2002) The Achievements and Failures of Argentina's Neo-Liberal Economic Policies, Oxford Development Studies, Vol. 30, No. 1, pp. 63–85. * Bird, Graham. (2002) Argentina's Currency Board: Cry for Argentina - But not for its currency board, New Economy: Surrey Centre for International Economic Studies, pp. 158–165. * Cavallo, Domingo F. & Cottani, Joaquin A. (1997) Argentina's Convertibility Plan and the IMF, AEA Papers and Proceedings, May, Vol. 87, No. 2, pp. 17–22. * de la Torre, Augusto; Levy Yeyati, Eduardo & Schmukler, Sergio L. (2003) Living and Dying with Hard Pegs: The Rise and Fall of Argentina's Currency Board, Journal of LACEA Economia, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION. * Dornbusch, Rudi. (2001) Exchange Rates and the Choice of Monetary-Policy Regimes: Fewer Monies, Better Monies, AEA Papers and Proceedings, May, Volume 91, No. 2, pp. 238–242. * Edwards, Sebastian. (2002) The Great Exchange Rate Debate after Argentina, The North American Journal of Economics and Finance, Volume 13, Issue 3, pp. 237–252. * Gurtner, Francois J. (2003) Currency Boards and Debt Traps: Evidence from Argentina and Relevance for Estonia, (Oxford, Blackwell Publishing Ltd.), pp. 209–228. * Hanke, Steve H. (2002) On Dollarization and Currency Boards: Error and Deception, Policy Reform, Vol 5 (4), pp. 203–222. * Hanke, Steve H. (2003) The Argentine Straw Man: A response to Currency Board Critics, Cato Journal, Spring/Summer, Vol. 23, No. 1, p. 47-57. * Horn, Gustav A., Fritsche, Ulrich. (2002) Argentina in Crisis, DIW Economic Bulletin, Vol. 39, No. 4, pp. 119–126. * Levy Yeyati, Eduardo (2006) Liquidity Insurance in a Financially Dollarized Economy, NBER Working Papers 12345, National Bureau of Economic Research, Inc. * Schuler, Kurt. (2002) Fixing Argentina, Policy Analysis, July 16, No. 445.


See also

*
Economy of Argentina The economy of Argentina is the second-largest national economy in South America, behind Brazil. Argentina has a human Development Index classified as "very high" by the United Nations, with a highly literate population, an export-oriented Agricult ...
*
Argentine economic crisis (1999-2002) Argentina has faced several economic crises, such as: * The Rodrigazo (1975) * The 1989 hyperinflation in Argentina * The 1998–2002 Argentine great depression The 1998–2002 Argentine great depression was an economic depression in Argentina ...


References


External links


The Crisis that Was Not Prevented: Lessons for Argentina, the IMF, and Globalisation, Jan Joost Teunissen and Age Akkerman (eds.), Fondad, 2003, book, pdf)


*[https://ideas.repec.org/p/wbk/wbrwps/3440.html Levy-Yeyati, Eduardo & Martinez Peria, Maria Soledad & Schmukler, Sergio L., 2004. Market discipline under systemic risk - evidence from bank runs in emerging economies, Policy Research Working Paper Series 3440, The World Bank)] {{Carlos Menem Presidency of Carlos Menem Economic history of Argentina, Currency Board 1991 establishments in Argentina 2002 disestablishments in Argentina