IDEAS home Printed from https://ideas.repec.org/a/ejw/journl/v2y2005i2p234-278.html
   My bibliography  Save this article

Ignorance and Influence: U.S. Economists on Argentina's Depression of 1998–2002

Author

Listed:
  • Kurt Schuler

Abstract

Economists in the United States wrote reams of commentary on Argentina’s recession-turned-depression of 1998–2002. Most ignored basic facts that were readily available. As a result, they committed important errors, including mistaking Argentina’s central banking system for a currency board and claiming that Argentina’s exports were uncompetitive when in fact Argentina’s share of world exports was growing. The faulty analysis of U.S. and other economists provided justifications for decisions by the Argentine government in early 2002 to devalue the Argentine peso and forcibly convert U.S. dollar assets and liabilities into pesos. Argentina’s depression deepened and exports failed to revive quickly.

Suggested Citation

  • Kurt Schuler, 2005. "Ignorance and Influence: U.S. Economists on Argentina's Depression of 1998–2002," Econ Journal Watch, Econ Journal Watch, vol. 2(2), pages 234-278, August.
    • Handle: RePEc:ejw:journl:v:2:y:2005:i:2:p:234-278
    as

    Download full text from publisher

    File URL: https://econjwatch.org/File+download/86/2005-08-schuler-tyranny_statquo.pdf?mimetype=pdf
    Download Restriction: no
    File URL: https://econjwatch.org/198
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edwards, Sebastian, 2002. "The great exchange rate debate after Argentina," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 237-252, December.
    2. Werner Baer & Pedro Elosegui & Andres Gallo, 2002. "The Achievements and Failures of Argentina's Neo-liberal Economic Policies," Oxford Development Studies, Taylor & Francis Journals, vol. 30(1), pages 63-85.
    3. Schmukler, Sergio L. & Serven, Luis, 2002. "Pricing currency risk under currency boards," Journal of Development Economics, Elsevier, vol. 69(2), pages 367-391, December.
    4. Perry, Guillermo & Serven, Luis, 2003. "The anatomy of a multiple crisis : why was Argentina special and what can we learn from it?," Policy Research Working Paper Series 3081, The World Bank.
    5. Lee Alston & Andrés Gallo, 2002. "The Political Economy of Bank Reform in Argentina Under Convertibility," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(1), pages 1-16.
    6. Sebastian Edwards & Miguel A. Savastano, 1999. "Exchange Rates in Emerging Economies: What Do We Know? What Do We Need to Know?," NBER Working Papers 7228, National Bureau of Economic Research, Inc.
    7. repec:cto:journl:v:20:y:2000:i:1:p:49-59 is not listed on IDEAS
    8. Eichengreen, Barry, 2002. "Financial Crises and What to Do About Them," OUP Catalogue, Oxford University Press, number 9780199257447, Decembrie.
    9. Feldstein, Martin, 1999. "A Self-Help Guide for Emerging Markets," Scholarly Articles 2961700, Harvard University Department of Economics.
    10. Morris Goldstein, 2002. "Managed Floating Plus," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa66, October.
    11. Martin S. Feldstein, 2003. "Economic and Financial Crises in Emerging Market Economies.An Overview of Prevention and Management," NBER Chapters, in: Economic and Financial Crises in Emerging Market Economies, pages 1-30, National Bureau of Economic Research, Inc.
    12. Mr. Adam Bennett, 1994. "Currency Boards: Issues and Experiences," IMF Policy Discussion Papers 1994/018, International Monetary Fund.
    13. International Monetary Fund, 2001. "Pakistan: Third Review Under the Stand-By Arrangement and Request for Waiver of Performance Criterion," IMF Staff Country Reports 2001/178, International Monetary Fund.
    14. Alejandro Izquierdo & Ernesto Talvi & Guillermo A. Calvo, 2002. "Sudden Stops, the Real Exchange Rate and Fiscal Sustainability: Argentina's Lessons," Research Department Publications 4299, Inter-American Development Bank, Research Department.
    15. Steve Hanke, 2002. "On dollarization and currency boards: Error and deception," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 203-222.
    16. Paul F. M. Krabbe & Eddy M. M. Adang & Peep F. M. Stalmeier & Bruce R. Schackman & John Brazier & Milton C. Weinstein, 2003. "Letter to the Editor," Medical Decision Making, , vol. 23(6), pages 542-543, November.
    17. McCallum, Bennett T., 1996. "International Monetary Economics," OUP Catalogue, Oxford University Press, number 9780195094947, Decembrie.
    18. Michael Mussa, 2002. "Argentina and the Fund: From Triumph to Tragedy," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa67, February.
    19. Alejandro Izquierdo, 2002. "Sudden Stops, the Real Exchange Rate and Fiscal Sustainability in Argentina," The World Economy, Wiley Blackwell, vol. 25(7), pages 903-923, July.
    20. International Monetary Fund, 2001. "Argentina: Third Review Under the Stand-By Arrangement, Request for Waivers and Modification of the Program," IMF Staff Country Reports 2001/090, International Monetary Fund.
    21. Feldstein, Martin, 2002. "Argentina's Fall: Lessons from the Latest Financial Crisis," Scholarly Articles 2959849, Harvard University Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hanke, Steve, 2017. "On Venezuela's Tragic Meltdown," Studies in Applied Economics 78, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    2. Kurt Schuler, 2006. "Reply to David Altig and Brad Setser," Econ Journal Watch, Econ Journal Watch, vol. 3(1), pages 105-108, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jérôme Sgard, 2004. "Ce qu’on en dit après : le « currency board » argentin et sa fin tragique," SciencePo Working papers Main hal-01019663, HAL.
    2. Jérôme Sgard, 2004. "Ce qu’on en dit après : le « currency board » argentin et sa fin tragique," Post-Print hal-01019663, HAL.
    3. Augusto de la Torre & Eduardo Levy Yeyati & Sergio L. Schmukler, 2003. "Living and Dying with Hard Pegs: The Rise and Fall of Argentina’s Currency Board," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 43-108, January.
    4. repec:hal:spmain:info:hdl:2441/6827 is not listed on IDEAS
    5. Jérôme Sgard, 2004. "Ce qu'on en dit après - le Currency Board argentin et sa fin tragique," Sciences Po publications info:hdl:2441/6827, Sciences Po.
    6. Jérôme Sgard, 2004. "Ce qu’on en dit après : le « currency board » argentin et sa fin tragique," Revue d'Économie Financière, Programme National Persée, vol. 75(2), pages 129-151.
    7. Jeffrey A. Frankel & Shang-Jin Wei, 2004. "Managing Macroeconomic Crises," NBER Working Papers 10907, National Bureau of Economic Research, Inc.
    8. World Bank, 2003. "Argentina : Reforming Policies and Institutions for Efficiency and Equity of Public Expenditures," World Bank Publications - Reports 14637, The World Bank Group.
    9. repec:hal:wpspec:info:hdl:2441/6827 is not listed on IDEAS
    10. Eduardo Wiesner, 2008. "The Political Economy of Macroeconomic Policy Reform in Latin America," Books, Edward Elgar Publishing, number 12913.
    11. Figueiredo, Carlos Maurício Cabral & Nóbrega, Marcos Antônio Rios da, 2003. "The Fiscal Accountability Act: Brazil's experience," Seminarios y Conferencias 6617, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. Mr. Enzo Croce & Mr. V. Hugo Juan-Ramon, 2003. "Assessing Fiscal Sustainability: A Cross-Country Comparison," IMF Working Papers 2003/145, International Monetary Fund.
    13. Alain Raybaut & Dominique Torre, 2004. "Unions monétaires, caisses d'émission et dollarisation : les fondements analytiques des systèmes de change « ultra-fixes »," Revue d'Économie Financière, Programme National Persée, vol. 75(2), pages 37-54.
    14. Fujiki, Hiroshi & Watanabe, Kiyoshi, 2003. "Effects of External Debt on Domestic Resource Allocation in a Small Open Economy with Limited Access to the World Capital Market," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 21(4), pages 21-56, December.
    15. Amieva-Huerta, Juan, 2003. "Federalismo fiscal: el caso de México," Seminarios y Conferencias 6620, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    16. Gómez de la O., Eduardo, 2003. "La descentralización fiscal en México," Seminarios y Conferencias 6621, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. repec:spo:wpecon:info:hdl:2441/6827 is not listed on IDEAS
    18. Busse, Matthias & Hefeker, Carsten & Koopmann, Georg, 2006. "Between two poles: A dual currency board for Mercosur," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 349-362, December.
    19. Kathryn M. E. Dominguez & Linda L. Tesar, 2007. "International Borrowing and Macroeconomic Performance in Argentina," NBER Chapters, in: Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences, pages 297-348, National Bureau of Economic Research, Inc.
    20. Mr. V. Hugo Juan-Ramon & Emiliano Basco & Carlos Quarracino & Mr. Adolfo Barajas, 2006. "Banks During the Argentine Crisis: Were they All Hurt Equally? Did they All Behave Equally?," IMF Working Papers 2006/042, International Monetary Fund.
    21. Sebastian Auguste & Kathryn M.E. Dominguez & Herman Kamil & Linda L. Tesar, 2002. "Cross-Border Trading as a Mechanism for Capital Flight: ADRs and the Argentine Crisis," NBER Working Papers 9343, National Bureau of Economic Research, Inc.
    22. Michael Bleaney, 2004. "Argentina's Currency Board Collapse: Weak Policy or Bad Luck?," The World Economy, Wiley Blackwell, vol. 27(5), pages 699-714, May.
    23. Perry, Guillermo & Serven, Luis, 2003. "The anatomy of a multiple crisis : why was Argentina special and what can we learn from it?," Policy Research Working Paper Series 3081, The World Bank.

    More about this item

    Keywords

    Argentina; convertibility; currency board; economists;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ejw:journl:v:2:y:2005:i:2:p:234-278. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jason Briggeman (email available below). General contact details of provider: https://edirc.repec.org/data/edgmuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.