The Argentine Financial Crisis
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Code : ECC0001
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Region : Argentina |
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Introduction: Before theWorldWar II,Argentina was one of themost prosperous countries in the world. It was rich in agricultural and energy resources. The country had a liberal financial policy, which encouraged mobilization of savings. From the 1940s, its economic growth declined as it restricted its financial and trade policies. During the 1970s, the country was marred by political and economic instability. Between 1976 and 1982, whenArgentina was under the military dictators, it accumulated huge external debts. After it gained democracy in 1983, it conducted four stabilization programs. In April 1991, the Carlos government introduced the Convertibility Law. The value of the Argentine peso was fixed at one peso per US dollar and a currency board was established. From 1991 to 1994, Argentina's economy grew and its deficits decreased. The devaluation of the Mexican peso in 1994 and the devaluation of the Brazilian real in 1998 shook the confidence of the Argentine investors... |
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