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Journal Article
Argentina, Mexico, and currency boards: another case of rules versus discretion
This article discusses currency boards in light of the recent economic experiences of Mexico and Argentina. Carlos Zarazaga argues that currency boards do not solve the important time inconsistency problem pointed out in the rules-versus-discretion literature. Because of this failure, even the quasi-currency board established by law (the so-called convertibility law) did not protect Argentina from one of its most severe financial crises in modern times. ; In addition, there is the normative issue of whether an ironclad rule such as a currency board rule is superior to a noncontingent one. ...
Journal Article
Dollarization and monetary sovereignty: the case of Argentina
In January, President Menim of Argentina proposed strengthening his country's commitment to monetary stability by replacing the peso with the U.S. dollar. Dollarization leaves Argentina without a lender of last resort, but the Federal Reserve's current operating procedure combines with existing Argentine arrangements to mitigate this drawback.
Journal Article
Argentina: the end of convertibility
Journal Article
Implications of the globalization of the banking sector: the Latin American experience
Foreign entry into domestic banking markets remains a contentious issue. Whether privatizing a state bank in Brazil or selling a failed bank in Japan, the proposed sale of a large domestic financial institution, possibly to a foreign acquirer, frequently results in a major controversy. Many Asian countries have yet to experience major foreign penetration of domestic banking markets, while Latin American countries have privatized many of their banks and have encouraged foreign banks to enter their domestic markets. ; Because many Latin American countries opened their markets during the 1990s, ...
Working Paper
Argentina's recovery and \"excess\" capital shallowing of the 1990s
The paper examines Argentina?s economic expansion in the 1990s through the lens of a parsimonious neoclassical growth model. The main finding is that investment remained considerably weaker than what the model would have predicted. The resulting excessive ?capital shallowing? could be identified as a weakness of the rapid economic growth of the 1990s that may have played a role in Argentina?s ultimate inability to escape the crisis that started to unfold towards the end of that decade.
Journal Article
Argentina's currency crisis: lessons for Asia
This Economic Letter is based on a presentation Mark Spiegel prepared for a panel on "Optimal Currency Arrangements for Emerging Market Economies: The Experience of Latin America and Asia" organized by the Latin American and Asian Economics and Business Association on July 15, 2002, in Tokyo, Japan
Journal Article
Dollarization in Argentina
Working Paper
Argentina’s “Missing Capital” Puzzle and Limited Commitment Constraints
Capital accumulation in Argentina was slow in the 1990s, despite high total factor productivity (TFP) growth and low international interest rates. A possible explanation for the ?missing capital? is that foreign investors were reluctant to take advantage of the high returns to investment seemingly offered by that small open economy under such favorable conditions, on the grounds that previous historical developments had led them to perceive Argentina as a country prone to external debt ?opportunistic defaults.? The paper examines this conjecture from the perspective of an optimal contract ...
Journal Article
Tough decisions for Argentina