IDEAS home Printed from https://ideas.repec.org/a/ecr/col070/10884.html
   My bibliography  Save this article

Growth, instability and the convertibility crisis in Argentina

Author

Listed:
  • Fanelli, José María

Abstract

The Argentine economy is currently going through the deepest and most prolonged recession of the postwar period: a devastating panorama that contrasts vividly with its significant growth in 1991-1998.In this article we will analyse the macroeconomic dimensions of the crisis which led to the abandonment of convertibility.Firstly,we will identify some structural weaknesses of the Argentine economy that are a source of macroeconomic instability.In particular,we will study the role of the imperfect access to international capital markets,the limited openness,the lack of financial depth and the nominal and policy rigidities,as well as the role of the errors in expectations and volatility. Secondly,we will examine the sequence of disturbances (shocks);in 1998-1999,concluding that the simultaneity of many of them aggravated their effects and that,under the convertibility régime,the economy was not prepared to face such consequences.Finally,we will briefly outline the policies that the country should apply in order to restore macroeconomic and financial stability.

Suggested Citation

  • Fanelli, José María, 2002. "Growth, instability and the convertibility crisis in Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    • Handle: RePEc:ecr:col070:10884
    Note: Includes bibliography
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/10884
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Susanto Basu & Alan M. Taylor, 1999. "Business Cycles in International Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 45-68, Spring.
    2. Froot, Kenneth A. & Rogoff, Kenneth, 1995. "Perspectives on PPP and long-run real exchange rates," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 32, pages 1647-1688, Elsevier.
    3. Daniel Heymann & Martin Kaufman & Pablo Sanguinetti, 2001. "Learning about Trends: Spending and Credit Fluctuations in Open Economies," International Economic Association Series, in: Axel Leijonhufvud (ed.), Monetary Theory as a Basis for Monetary Policy, chapter 6, pages 173-214, Palgrave Macmillan.
    4. Axel Leijonhufvud (ed.), 2001. "Monetary Theory as a Basis for Monetary Policy," International Economic Association Series, Palgrave Macmillan, number 978-1-4039-3961-6, November.
    5. G. M. Grossman & K. Rogoff (ed.), 1995. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 3, number 3.
    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. Charles W. Calomiris & Andrew Powell, 2000. "Can Emerging Market Bank Regulators Establish Credible Discipline? The Case of Argentina, 1992-1999," NBER Working Papers 7715, National Bureau of Economic Research, Inc.
    8. Jose Maria Fanelli & Ricardo N. Bebczuk & Juan J. Pradelli, 2002. "Determinants and Consequences of Financial Constraints Facing Firms in Argentina," Research Department Publications 3147, Inter-American Development Bank, Research Department.
    9. Alan M. Taylor, 2002. "A Century Of Purchasing-Power Parity," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 139-150, February.
    10. Agenor, Pierre-Richard & McDermott, C John & Prasad, Eswar S, 2000. "Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts," The World Bank Economic Review, World Bank, vol. 14(2), pages 251-285, May.
    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. Valeria Arza & Elisa Giuliani & Federica Nieri, 2019. "DRIFTING ON A CALMA CHICHA AFTER COUNTLESS STORMS: How macroeconomic uncertainty affects firms' de cisions to innovate in emerging countries," Discussion Papers 2019/251, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Laurine Martinoty, 2014. "Intra-Household Coping Mechanisms in Hard Times: the Added Worker Effect in the 2001 Argentine Economic Crisis," Post-Print halshs-01076566, HAL.
    3. Arza, Valeria & López, Emanuel, 2021. "Obstacles affecting innovation in small and medium enterprises: Quantitative analysis of the Argentinean manufacturing sector," Research Policy, Elsevier, vol. 50(9).
    4. Martinoty, Laurine, 2022. "Partner’s income shock and female labor supply. Evidence from the repeal of Argentina’s convertibility law," World Development, Elsevier, vol. 159(C).
    5. Elosegui, Pedro & González, Mirta & Pérez, María Cecilia & Sangiácomo, Máximo, 2024. "A diffusion index analysis of the Argentinean business economic cycle based on the “Survey of Business Economic Perspectives”," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 5(2).
    6. Arza,Valeria Luciana & Cirera,Xavier & Colonna,Agustina & Lopez,Emanuel, 2020. "Explaining Differences in the Returns to R&D in Argentina : The Role of Contextual Factors and Complementarities," Policy Research Working Paper Series 9219, The World Bank.
    7. Andrea Vaona, 2013. "Countervailing inequality effects of globalization and renewable energy generation in Argentina," Working Papers 12/2013, University of Verona, Department of Economics.

    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. José Maria FANELLI, 2007. "Regional arrangements to support growth and macro-policy coordination in MERCOSUR," G-24 Discussion Papers 46, United Nations Conference on Trade and Development.
    2. Heng, Dyna, 2011. "Capital flows and real exchange rate: does financial development matter?," MPRA Paper 48553, University Library of Munich, Germany, revised May 2012.
    3. Hong, Seung Hyun & Phillips, Peter C. B., 2010. "Testing Linearity in Cointegrating Relations With an Application to Purchasing Power Parity," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(1), pages 96-114.
    4. John Y. Campbell & Luis M. Viceira & Joshua S. White, 2003. "Foreign Currency for Long-Term Investors," Economic Journal, Royal Economic Society, vol. 113(486), pages 1-25, March.
    5. Renu Kohli, 2004. "Real Exchange Rate Stationarity in Managed Floats: Evidence from India," International Finance 0405011, University Library of Munich, Germany.
    6. Philip R. Lane & Gian Maria Milesi-Ferretti, 2004. "The Transfer Problem Revisited: Net Foreign Assets and Real Exchange Rates," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 841-857, November.
    7. Anna Larsson, 2004. "The Swedish real exchange rate under different currency regimes," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(4), pages 706-727, December.
    8. Kenneth A. Froot & Michael Kim & Kenneth Rogoff, 2019. "The Law of One Price Over 700 Years," Annals of Economics and Finance, Society for AEF, vol. 20(1), pages 1-35, May.
    9. Sarno, Lucio & Valente, Giorgio, 2006. "Deviations from purchasing power parity under different exchange rate regimes: Do they revert and, if so, how?," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3147-3169, November.
    10. Hanck, Christoph, 2006. "For Which Countries did PPP hold? A Multiple Testing Approach," Technical Reports 2006,47, Technische Universität Dortmund, Sonderforschungsbereich 475: Komplexitätsreduktion in multivariaten Datenstrukturen.
    11. Lucio Sarno, 2003. "Nonlinear Exchange Rate Models: A Selective Overview," Rivista di Politica Economica, SIPI Spa, vol. 93(4), pages 3-46, July-Augu.
    12. Marcos José Dal Bianco, 2008. "Argentinean real exchange rate 1900-2006, test purchasing power parity theory," Estudios de Economia, University of Chile, Department of Economics, vol. 35(1 Year 20), pages 33-64, June.
    13. Guglielmo Maria Caporale & Christoph Hanck, 2009. "Cointegration tests of PPP: do they also exhibit erratic behaviour?," Applied Economics Letters, Taylor & Francis Journals, vol. 16(1), pages 9-15.
    14. Claire Giordano, 2021. "How frequent a BEER? Assessing the impact of data frequency on real exchange rate misalignment estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(3), pages 365-404, July.
    15. Ashima Goyal, 2014. "Purchasing Power Parity, Wages and Inflation in Emerging Markets," Foreign Trade Review, , vol. 49(4), pages 327-347, November.
    16. Nadezhda Ivanova, 2007. "Estimation of the Equilibrium Real Exchange Rate in Russia: Trade-Balance Approach," Working Papers w0102, Center for Economic and Financial Research (CEFIR).
    17. David O. Cushman, 2008. "Real exchange rates may have nonlinear trends," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(2), pages 158-173.
    18. Rod Tyers & Ying Zhang, 2014. "Real exchange rate determination and the China puzzle," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 28(2), pages 1-32, November.
    19. Jorge Carrera & Diego Bastourre, 2004. "Could the Exchange Rate Regime Reduce Macroeconomic Volatility?," Econometric Society 2004 Latin American Meetings 309, Econometric Society.
    20. Jorge Carrera & Romain Restout, 2008. "Long Run Determinants of Real Exchange Rates in Latin America," Post-Print halshs-00276402, HAL.

    More about this item

    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:ecr:col070:10884. 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: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.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.