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Cyclical implications of the balance-of-payments constraint in Argentina (1930–2018)

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  • Catelén, Ana Laura

Abstract

This paper tests for the cyclical implications of the external constraint in Argentina from 1930 to 2018, and investigates the responses of GDP, real wages, trade balance, and external debt to external trade shocks using a recursive vector-autoregressive model. Moreover, considering the shift in development strategy in 1976, marked by the transition from state-led industrialization to deregulation and trade openness, changes in external vulnerability are analyzed. Results confirm a trade balance bottleneck hindering future growth, and that external debt fails to spur short-term growth or improve the purchasing power of the population, thereby confirming the vicious cyclical dynamics of stop-and-go and go-and-crash for the entire period. Also, real external vulnerability grew significantly after 1976, as evidenced by the fact that the cumulative impact of movements in the terms of trade and external demand rose from explaining 30% to 43% of GDP variation.

Suggested Citation

  • Catelén, Ana Laura, 2025. "Cyclical implications of the balance-of-payments constraint in Argentina (1930–2018)," Nülan. Deposited Documents 4364, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    • Handle: RePEc:nmp:nuland:4364
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    File URL: https://nulan.mdp.edu.ar/id/eprint/4364/1/catelen-2025.pdf
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    References listed on IDEAS

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    5. P&aauml;r Österholm & Jeromin Zettelmeyer, 2008. "The Effect of External Conditions on Growth in Latin America," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 595-623, December.
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