This paper sheds light on microeconomic sustainability after complete financial liberalisation was implemented in Argentina during the 1990s. Inspired by Keynes and Minsky, we estimate an investment model that accounts for financial constraints using panel data for Argentina during the 1990s. The main conclusion of the study is that there was an increase in speculative behaviour which was unconnected to entrepreneurial behaviour based on investment in fixed assets. Over the decade, the number of speculative firms increased. Moreover, these firms increased their debt burden, particularly with financial institutions. However, they did not use these funds to invest in fixed assets.
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Paper provided by University of Sussex, SPRU - Science and Technology Policy Research in its series SPRU Electronic Working Paper Series with number
135.
Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data D21 - Microeconomics - - Production and Organizations - - - Firm Behavior O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
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