Lessons from the Crisis in Argentina

Occasional Papers, February 10, 2005

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Lessons from the Crisis in Argentina

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Bibliographic details

• Authors: Christina Daseking, Atish R. Ghosh, Timothy D. Lane, Alun H. Thomas
• Published: February 10, 2005
• Series: Occasional Papers
• DOI: https://doi.org/10.5089/9781589063594.084

Crisis overview

• In 2001- 02, Argentina experienced one of the worst economic crises in its history.
• A default on government debt, occurring against the backdrop of a prolonged recession, sent the Argentine currency and economy into a tailspin.
• Although the economy has since recovered from the worst, the crisis has imposed hardships on the people of Argentina, and the road back to sustained growth and stability is long.
• The crisis was especially troubling because Argentina was widely considered a model reformer and was engaged in a succession of IMF-supported programs through much of the 1990s.
• The paper examines the origins of the crisis and its evolution up to early 2002.

Origins and evolution (scope of analysis)

• Examination focuses on origins of the crisis and its evolution up to early 2002.
• Context emphasizes: default on government debt, prolonged recession, currency collapse, and policy environment shaped by prior IMF-supported programs.

Key findings and themes

• The crisis combined sovereign default with severe macroeconomic dislocation (currency and economy in a tailspin).
• Recovery has occurred from the worst phases, but substantial hardships and a long path to sustained growth and stability remain.
• The Argentine experience is notable because it followed a period in which Argentina was viewed as a reform model during the 1990s.

Policy lessons and implications

• The Occasional Paper draws general policy lessons:
  • Lessons for countries’ efforts to prevent crises.
  • Lessons for the IMF’s surveillance and use of its financial resources.
• Emphasis on using the Argentine case to inform crisis prevention, crisis management, and the design and monitoring of IMF-supported programs.

Subject areas and keywords (as listed)

• Subject: Currency boards, Exchange rate arrangements, Exports, Foreign exchange, International trade, Public debt, Real exchange rates, Real interest rates
• Keywords: Africa, Caribbean, convertibility regime, crisis, Currency boards, debt, deficit, deposit withdrawal, East Asia, Exchange rate arrangements, Exports, Global, IMF exposure, IMF support, OP, Real exchange rates, regime, withdrawal limit

Lessons from the Crisis in Argentina — Occasional Paper No. 2005/003, International Monetary Fund.

Content in this bundle

• Lessons from the Crisis in Argentina -- Christina Daseking et al. -- Occasional Paper 236
  • Lessons from the Crisis in Argentina -- Christina Daseking et al. -- Occasional Paper 236 (Markdown version)
  • Lessons from the Crisis in Argentina -- Christina Daseking et al. -- Occasional Paper 236 (PDF)