What can we learn from the current crisis in Argentina?

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

Currently, Argentina is experiencing what the government describes as a 'great depression.' Using the 'Great Depressions' methodology developed by Cole and Ohanian (1999) and Kehoe and Prescott (2002), we find that the primary determinants of both the boom in Argentina in the 1990s and the subsequent depression were changes in productivity, rather than changes in factor inputs. The timing of events links the boom to the currency-board-like Convertibility Plan and the crisis to its collapse. To gain credibility, the Argentine government took measures to make abandoning the plan more costly. Because the government was unable to enforce fiscal discipline, however, these increased costs failed to make the plan more credible and instead made the crisis far worse when it failed.

Original languageEnglish (US)
Pages (from-to)609-633
Number of pages25
JournalScottish Journal of Political Economy
Volume50
Issue number5
DOIs
StatePublished - Nov 1 2003

Fingerprint

Argentina
Great Depression
convertibility
currency
credibility
productivity
determinants
event
methodology
costs
Government
Credibility
Methodology
Convertibility
Currency board
Productivity
Costs
Factors
Fiscal discipline

Cite this

What can we learn from the current crisis in Argentina? / Kehoe, Timothy J.

In: Scottish Journal of Political Economy, Vol. 50, No. 5, 01.11.2003, p. 609-633.

Research output: Contribution to journalArticle

@article{006d7bc97fb54d6395560fca5d8954b7,
title = "What can we learn from the current crisis in Argentina?",
abstract = "Currently, Argentina is experiencing what the government describes as a 'great depression.' Using the 'Great Depressions' methodology developed by Cole and Ohanian (1999) and Kehoe and Prescott (2002), we find that the primary determinants of both the boom in Argentina in the 1990s and the subsequent depression were changes in productivity, rather than changes in factor inputs. The timing of events links the boom to the currency-board-like Convertibility Plan and the crisis to its collapse. To gain credibility, the Argentine government took measures to make abandoning the plan more costly. Because the government was unable to enforce fiscal discipline, however, these increased costs failed to make the plan more credible and instead made the crisis far worse when it failed.",
author = "Kehoe, {Timothy J}",
year = "2003",
month = "11",
day = "1",
doi = "10.1111/j.0036-9292.2003.05005002.x",
language = "English (US)",
volume = "50",
pages = "609--633",
journal = "Scottish Journal of Political Economy",
issn = "0036-9292",
publisher = "Wiley-Blackwell",
number = "5",

}

TY - JOUR

T1 - What can we learn from the current crisis in Argentina?

AU - Kehoe, Timothy J

PY - 2003/11/1

Y1 - 2003/11/1

N2 - Currently, Argentina is experiencing what the government describes as a 'great depression.' Using the 'Great Depressions' methodology developed by Cole and Ohanian (1999) and Kehoe and Prescott (2002), we find that the primary determinants of both the boom in Argentina in the 1990s and the subsequent depression were changes in productivity, rather than changes in factor inputs. The timing of events links the boom to the currency-board-like Convertibility Plan and the crisis to its collapse. To gain credibility, the Argentine government took measures to make abandoning the plan more costly. Because the government was unable to enforce fiscal discipline, however, these increased costs failed to make the plan more credible and instead made the crisis far worse when it failed.

AB - Currently, Argentina is experiencing what the government describes as a 'great depression.' Using the 'Great Depressions' methodology developed by Cole and Ohanian (1999) and Kehoe and Prescott (2002), we find that the primary determinants of both the boom in Argentina in the 1990s and the subsequent depression were changes in productivity, rather than changes in factor inputs. The timing of events links the boom to the currency-board-like Convertibility Plan and the crisis to its collapse. To gain credibility, the Argentine government took measures to make abandoning the plan more costly. Because the government was unable to enforce fiscal discipline, however, these increased costs failed to make the plan more credible and instead made the crisis far worse when it failed.

UR - http://www.scopus.com/inward/record.url?scp=0348225866&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0348225866&partnerID=8YFLogxK

U2 - 10.1111/j.0036-9292.2003.05005002.x

DO - 10.1111/j.0036-9292.2003.05005002.x

M3 - Article

VL - 50

SP - 609

EP - 633

JO - Scottish Journal of Political Economy

JF - Scottish Journal of Political Economy

SN - 0036-9292

IS - 5

ER -