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Structural Volatility in Argentina: A Policy Report

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  • Ricardo J. Caballero

Abstract

The author identifies sources of volatility in Argentina that include weak international financial links, a recurrent credit crunch and financial underdevelopment problem, a fragile fiscal situation, and a pervasive profit and collateral squeeze mechanism brought about by a rigid labor market and exchange rate system. The paper`s policy recommendations include improving external financial links, continuing and accelerating the path of domestic financial deepening, giving very high priority to the reduction of the public debt burden problem, and addressing the fundamental incompatibility between labor market rigidities and a highly inflexible exchange rate system.

Suggested Citation

  • Ricardo J. Caballero, 2000. "Structural Volatility in Argentina: A Policy Report," Research Department Publications 4213, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:4213
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    References listed on IDEAS

    as
    1. Ricardo J. Caballero, 2000. "Structural Volatility in Chile: A Policy Report," Research Department Publications 4211, Inter-American Development Bank, Research Department.
    2. Hans J. Blommestein, 1997. "Institutional Investors, Pension Reform, and Emerging Securities Markets," Research Department Publications 4094, Inter-American Development Bank, Research Department.
    3. David Card & Dean Hyslop, 1997. "Does Inflation "Grease the Wheels of the Labor Market"?," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 71-122, National Bureau of Economic Research, Inc.
    4. Ricardo Caballero & Arvind Krishnamurthy, 1998. "Emerging Market Crises: An Asset Markets Perspective," Working papers 98-18, Massachusetts Institute of Technology (MIT), Department of Economics.
    5. Ricardo Hausmann & Michael Gavin & Carmen Pagés-Serra & Ernesto H. Stein, 1999. "Financial Turmoil and Choice of Exchange Rate Regime," Research Department Publications 4170, Inter-American Development Bank, Research Department.
    6. Ricardo J. Caballero & Mohamad L. Hammour, 1996. "On the Timing and Efficiency of Creative Destruction," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 805-852.
    7. Ricardo J. Caballero, 2000. "Structural Volatility in Chile: A Policy Report," Research Department Publications 4211, Inter-American Development Bank, Research Department.
    8. Ricardo Hausmann & Michael Gavin & Carmen Pagés & Ernesto H. Stein, 1999. "Financial Turmoil and the Choice of Exchange Rate Regime," IDB Publications (Working Papers) 4128, Inter-American Development Bank.
    9. David Card & Dean Hyslop, 1995. "Does Inflation 'Grease the Wheels of the Labor Market'?," Working Papers 735, Princeton University, Department of Economics, Industrial Relations Section..
    10. Hans J. Blommestein, 1997. "Institutional Investors, Pension Reform, and Emerging Securities Markets," Research Department Publications 4094, Inter-American Development Bank, Research Department.
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    Citations

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    Cited by:

    1. Ana Corbacho & Mercedes Garcia‐Escribano & Gabriela Inchauste, 2007. "Argentina: Macroeconomic Crisis and Household Vulnerability," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 92-106, February.
    2. Ricardo J. Caballero, 2000. "Structural Volatility in Mexico: A Policy Report," Research Department Publications 4209, Inter-American Development Bank, Research Department.
    3. Ricardo J.Caballero, 2001. "Macroeconomic volatility in Latin America: a view and three case studies," Estudios de Economia, University of Chile, Department of Economics, vol. 28(1 Year 20), pages 5-52, June.
    4. Ricardo J. Caballero, 2000. "Inestabilidad estructural en México: informe de políticas," Research Department Publications 4210, Inter-American Development Bank, Research Department.
    5. Rodrigo Bolaños Zamora, 1999. "Costa Rica: The Next Stage-Reform without Volatility. A Report," Research Department Publications 4196, Inter-American Development Bank, Research Department.
    6. Tasso Adamopoulos, 2008. "Land Inequality and the Transition to Modern Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 257-282, April.

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