Thirty Years of Currency Crises in Argentina: External Shocks or Domestic Fragility?
43 Pages Posted: 9 Nov 2009 Last revised: 17 Apr 2023
Date Written: November 2009
Abstract
This paper examines Argentina's currency crises from 1970 to 2001, with particular attention to the role of domestic and external factors. Using VAR estimations, we find that deteriorating domestic fundamentals matter. For example, at the core of the late 1980s crises was excessively loose monetary policy while a sharp output contration triggered the collapse of the currency board in January 2002. In contrast, adverse external shocks were at the heart of the 1995 crisis, with spillovers from the Mexican crisis and high world interest rates being key sources of financial distress.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
International and Domestic Collateral Constraints in a Model of Emerging Market Crises
-
International and Domestic Collateral Constraints in a Model of Emerging Market Crises
-
On the Empirics of Sudden Stops: The Relevance of Balance-Sheet Effects
By Guillermo A. Calvo, Alejandro Izquierdo, ...
-
Currency Crises and Monetary Policy in an Economy with Credit Constraints
By Philippe Aghion, Abhijit V. Banerjee, ...
-
On the Empirics of Sudden Stops: The Relevance of Balance-Sheet Effects
By Guillermo A. Calvo, Alejandro Izquierdo, ...
-
Current Account Reversals and Currency Crises: Empirical Regularities
-
Balance Sheets and Exchange Rate Policy
By Luis Felipe Cespedes, Roberto Chang, ...
-
Sudden Stops, the Real Exchange Rate, and Fiscal Sustainability: Argentina's Lessons
By Guillermo A. Calvo, Alejandro Izquierdo, ...
-
Sudden Stops, the Real Exchange Rate and Fiscal Sustainability: Argentina's Lessons
By Alejandro Izquierdo, Ernesto Talvi, ...
-
Thirty Years of Current Account Imbalances, Current Account Reversals and Sudden Stops