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Financial markets and monetary control under high inflation: The case of Argentina

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  • Fischer, Bernhard
  • Trapp, Peter

Abstract

Argentina's economic development over the last thirty years has been dominated by very high and variable inflation rates. There is widespread agreement that the financial sector is most seriously affected by persistent inflation. This was also true for Argentina. Due to interest rate ceilings and other regulations relative yields on particular financial assets have been affected differently by inflation. While the holdings of non-interest bearing assets (currency in circulation and demand deposits) were fully exposed to the inflation tax , time deposits at a controlled rate or indexed deposits were partially protected from inflation losses, however, at varying degrees. As a consequence there was a tendency to substitute money in circulation and demand deposits for interest-bearing, short-term assets.

Suggested Citation

  • Fischer, Bernhard & Trapp, Peter, 1985. "Financial markets and monetary control under high inflation: The case of Argentina," Kiel Working Papers 232, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:232
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    References listed on IDEAS

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    1. Pedro Aspe Armella & Rudiger Dornbusch & Maurice Obstfeld, 1983. "Financial Policies and the World Capital Market: The Problem of Latin American Countries," NBER Books, National Bureau of Economic Research, Inc, number arme83-1, March.
    2. Pedro Aspe Armella & Rudiger Dornbusch & Maurice Obstfeld, 1983. "Introduction to "Financial Policies and the World Capital Market: The Problem of Latin American Countries"," NBER Chapters, in: Financial Policies and the World Capital Market: The Problem of Latin American Countries, pages 1-4, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Klodt, Henning, 1986. "Statistics on labour productivity in West Germany: a guide to sources and methods," Kiel Working Papers 252, Kiel Institute for the World Economy (IfW Kiel).

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