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

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  • 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
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    References listed on IDEAS

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    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. Morris Goldstein, 2002. "Managed Floating Plus," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa66.
    5. Lee Alston & Andres 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.
    9. Feldstein, Martin, 1999. "A Self-Help Guide for Emerging Markets," Scholarly Articles 2961700, Harvard University Department of Economics.
    10. 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.
    11. McCallum, Bennett T., 1996. "International Monetary Economics," OUP Catalogue, Oxford University Press, number 9780195094947.
    12. Michael Mussa, 2002. "Argentina and the Fund: From Triumph to Tragedy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa67, January.
    13. Feldstein, Martin, 2002. "Argentina's Fall: Lessons from the Latest Financial Crisis," Scholarly Articles 2959849, Harvard University Department of Economics.
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    Cited by:

    1. Kurt Schuler, 2006. "Reply to David Altig and Brad Setser," Econ Journal Watch, Econ Journal Watch, vol. 3(1), pages 105-108, January.

    More about this item

    Keywords

    Argentina; convertibility; currency board; economists;

    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

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