IDEAS home Printed from https://ideas.repec.org/p/udt/wpecon/026.html
   My bibliography  Save this paper

Argentine Great Depression: 1975-1990

Author

Abstract

In the period 1974-1990 Argentina’s income per capita fell by 25%. A Solow growth decomposition shows that at most one quarter of this fall can be explained by a reduction in the capital/labor ratio. A study of labor reallocation shows that between 1973 and 1993 employment expanded the most in sectors with a declining output per worker and this reallocation of labor explains 44% of the fall in output per worker. We argue that policies that increase the cost of capital may explain these observations. Consider a two sector model where capital/labor substitution is low in the tradable goods sector and high in the non-traded goods one. If the steady state capital stocks falls, labor .ows from the tradable goods sector to the non-traded goods one, leading to a reduction in income per capita, productivity and wages. Thus, policies that increase the cost of capital have a direct e.ect on output through the fall in the capital stock and an indirect e.ect that operates through a reallocation of labor induced by the fall in investment.

Suggested Citation

  • Pablo Andres Neumeyer & Hugo Hopenhayn, 2002. "Argentine Great Depression: 1975-1990," Department of Economics Working Papers 026, Universidad Torcuato Di Tella.
  • Handle: RePEc:udt:wpecon:026
    as

    Download full text from publisher

    File URL: http://www.utdt.edu/download.php?fname=_116465913307356800.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Szilárd Benk & Max Gillman & Michal Kejak, 2005. "Credit Shocks in the Financial Deregulatory Era: Not the Usual Suspects," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(3), pages 668-687, July.
    2. Ferreira, Pedro Cavalcanti & Pessôa, Samuel de Abreu & Veloso, Fernando A., 2010. "The evolution of TFP in Latin America: high productivity when distortions were high?," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 699, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    3. Ferreira, Pedro Cavalcanti & Pessôa, Samuel de Abreu & Veloso, Fernando A., 2011. "On the evolution of TFP in Latin America," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 723, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).

    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:udt:wpecon:026. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin Cecilia Lafuente). General contact details of provider: http://edirc.repec.org/data/deutdar.html .

    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.

    We have no references for this item. You can help adding them by using 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.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.