Thirty Years of Currency Crises in Argentina: External Shocks or Domestic Fragility?

43 Pages Posted: 9 Nov 2009 Last revised: 18 Apr 2021

See all articles by Graciela Kaminsky

Graciela Kaminsky

George Washington University - Department of Economics; National Bureau of Economic Research (NBER)

Amine Mati

International Monetary Fund (IMF)

Nada Choueiri

International Monetary Fund (IMF) - Research Department

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

Kaminsky, Graciela and Mati, Amine and Choueiri, Nada, Thirty Years of Currency Crises in Argentina: External Shocks or Domestic Fragility? (November 2009). NBER Working Paper No. w15478, Available at SSRN: https://ssrn.com/abstract=1501503

Graciela Kaminsky (Contact Author)

George Washington University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Amine Mati

International Monetary Fund (IMF) ( email )

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United States

Nada Choueiri

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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