IDEAS home Printed from https://ideas.repec.org/p/cem/doctra/668.html
   My bibliography  Save this paper

Effects of heterodox populist policies in the private sector. The Argentine experience (2004-2016)

Author

Listed:
  • Diego G. Fano
  • Victor A. Lucero
  • Antonio Marin

Abstract

This study describes the effects of heterodox fiscal and monetary policies pursued by Argentina, associated with existing populist governments since 2004. Argentina's fiscal policy was characterized by increased public expenditures and the tax burden. The further expansion of public expenditure led to fiscal deficits that were financed by money creation, thereby triggering an inflationary process that, up to date, could not be controlled. In turn, the loss of value of the local currency led to a process of exodus of capital, which tried to be contained using exchange controls and restrictions, popularly known as "cepo cambiario" (dollar exchange clamp). The side effect of it was a significant overvaluation of the real exchange rate. In order to study the effects of these measures in private companies, the financial statements of 148 companies (that make public offer of shares in the stock market, with public financial statements) were analyzed, belonging to the sectors of construction, agriculture, food and oil industries, as well as 25 banks and financial institutions. It was observed that, in general, government policies significantly affected the profitability levels and investment rates for private companies, deteriorating margins and discouraging investment. In turn, banks and financial enterprises accompanied the rise of inflation with rising interest rates and declining loans to the productive and real estate sector, shifting its portfolio to finance short-term consumption. The results of this study can confirm the harmful effects of populist and heterodox policies over the real economy, especially related to the long-term effects associated with the loss of the investment.

Suggested Citation

  • Diego G. Fano & Victor A. Lucero & Antonio Marin, 2018. "Effects of heterodox populist policies in the private sector. The Argentine experience (2004-2016)," CEMA Working Papers: Serie Documentos de Trabajo. 668, Universidad del CEMA.
    • Handle: RePEc:cem:doctra:668
    as

    Download full text from publisher

    File URL: https://ucema.edu.ar/publicaciones/download/documentos/668.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James D. Hamilton, 2009. "Understanding Crude Oil Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 179-206.
    2. Schmitt, Gunther, 1989. "Farms, Farm Households, and Productivity of Resource Use in Agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 16(2), pages 257-284.
    3. Stigler, George J., 1983. "The Organization of Industry," University of Chicago Press Economics Books, University of Chicago Press, number 9780226774329, December.
    Full references (including those not matched with items on IDEAS)

    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. Marcos Gallacher, 2010. "The changing structure of production: Argentine agriculture 1988-2002," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 3-28, January-D.
    2. Hanne Fjelde & Desirée Nilsson, 2018. "The rise of rebel contenders," Journal of Peace Research, Peace Research Institute Oslo, vol. 55(5), pages 551-565, September.
    3. Haugom, Erik & Mydland, Ørjan & Pichler, Alois, 2016. "Long term oil prices," Energy Economics, Elsevier, vol. 58(C), pages 84-94.
    4. Pham T. T. Trinh & Bui T. T. My, 2023. "The impact of world oil price shocks on macroeconomic variables in Vietnam: the transmission through domestic oil price," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(1), pages 67-87, May.
    5. Umar, Muhammad & Su, Chi-Wei & Rizvi, Syed Kumail Abbas & Lobonţ, Oana-Ramona, 2021. "Driven by fundamentals or exploded by emotions: Detecting bubbles in oil prices," Energy, Elsevier, vol. 231(C).
    6. repec:ipg:wpaper:2014-442 is not listed on IDEAS
    7. Ansgar Belke & Daniel Gros, 2014. "A simple model of an oil based global savings glut—the “China factor”and the OPEC cartel," International Economics and Economic Policy, Springer, vol. 11(3), pages 413-430, September.
    8. Matteo Manera & Marcella Nicolini & Ilaria Vignati, 2013. "Futures price volatility in commodities markets: The role of short term vs long term speculation," DEM Working Papers Series 042, University of Pavia, Department of Economics and Management.
    9. Philippe Aghion & Antoine Dechezleprêtre & David Hémous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 1-51.
    10. Grossmann, Axel & Kim, Jintae, 2022. "The impact of U.S. dollar movements and U.S. dollar states on non-perishable commodity prices," Research in International Business and Finance, Elsevier, vol. 61(C).
    11. Bernardina Algieri, 2014. "A roller coaster ride: an empirical investigation of the main drivers of the international wheat price," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 459-475, July.
    12. Andreopoulos Spyros, 2009. "Oil Matters: Real Input Prices and U.S. Unemployment Revisited," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-31, March.
    13. Gerhard Toews and Alexander Naumov, 2015. "The Relationship Between Oil Price and Costs in the Oil Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Adelman S).
    14. Olivier Rousse & Benoît Sévi, 2017. "Informed Trading in Oil-Futures Market," Working Papers hal-01460186, HAL.
    15. Du, Xiaodong & Yu, Cindy L. & Hayes, Dermot J., 2011. "Speculation and volatility spillover in the crude oil and agricultural commodity markets: A Bayesian analysis," Energy Economics, Elsevier, vol. 33(3), pages 497-503, May.
    16. Naser, Hanan, 2016. "Estimating and forecasting the real prices of crude oil: A data rich model using a dynamic model averaging (DMA) approach," Energy Economics, Elsevier, vol. 56(C), pages 75-87.
    17. Kyritsis, Evangelos & Serletis, Apostolos, 2018. "The zero lower bound and market spillovers: Evidence from the G7 and Norway," Research in International Business and Finance, Elsevier, vol. 44(C), pages 100-123.
    18. Stavros Degiannakis, George Filis, and Renatas Kizys, 2014. "The Effects of Oil Price Shocks on Stock Market Volatility: Evidence from European Data," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    19. Chang, Roberto & Hevia, Constantino & Loayza, Norman, 2018. "Privatization And Nationalization Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 22(2), pages 331-361, March.
    20. Davidova, Sophia & Thomson, Kenneth J, "undated". "Family Farming in the Enlarged EU: Concepts, challenges and prospects," 142nd Seminar, May 29-30, 2014, Budapest, Hungary 170155, European Association of Agricultural Economists.
    21. Fan, Ying & Xu, Jin-Hua, 2011. "What has driven oil prices since 2000? A structural change perspective," Energy Economics, Elsevier, vol. 33(6), pages 1082-1094.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cem:doctra:668. 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: Valeria Dowding (email available below). General contact details of provider: https://edirc.repec.org/data/cemaaar.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.