Hyperinflation, Currency Board, and Bust: The Case of ArgentinaThis book focuses on « Convertibilidad, the latest Argentine experience of exchange rate based stabilisation, and aims at isolating the main causes for its tragic collapse in 2001-2002. The characteristics of Argentina's high and hyperinflation during the 1980s are analysed, and the theory of currency boards is expounded. The stabilisation tool, an institutionally highly credible currency board arrangement (CBA), though highly effective, could not be an optimal long-term solution, given the country's structural and trade characteristics. The analysis of the causes of the CBA's collapse yields a complex picture of interacting factors, among them invaliding ones that had created multiple vulnerabilities over years, and triggering ones that unfolded their worst potential in meeting such vulnerable conditions. |
Contents
ABBREVIATIONS AND ACRONYMS | 17 |
ARGENTINAS STABILISATION CHALLENGE | 25 |
STABILISATION PROGRAMMES IN ARGENTINA 19591990 | 27 |
Copyright | |
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Common terms and phrases
adjustment anchor currency Argentina assets Baliño/Enoch 1997 banking system Bernholz Brazil budget deficits Buenos Aires capital markets CBA's central bank convertibility costs credibility crises currency board country current account debt deposits depreciation Dollar dollarisation domestic currency economy effects employment Euro Evaluation Office 2004 exchange rate regime exit expectations exports external shocks federal financial sector fiscal policy fixed exchange rate foreign currency foreign exchange growth Hanke/Schuler 2000 Heymann Heymann/Leijonhufvud 1995 high inflation higher hyperinflation IMF Independent Evaluation important income increase Independent Evaluation Office industrial inflation rate inflation tax institutional interest rates Kiguel labour market last resort lender of last liquidity MERCOSUR monetary base monetary policy money stock nominal overvaluation Pastor/Wise payments percent of GDP Peso political potential privatisation programme provinces real exchange rate reduced reforms relative prices reserve currency reserve requirements revenues rise risk seigniorage stabilisation sustainability Tequila crisis trade wages Washington Consensus