Structural Volatility in Argentina: A Policy Report

50 Pages Posted: 21 Apr 2011

See all articles by Ricardo J. Caballero

Ricardo J. Caballero

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 2000

Abstract

The author identifies sources of volatility in Argentina that include weak international financial links, a recurrent credit crunch and financial underdevelopment problem, a fragile fiscal situation, and a pervasive profit and collateral squeeze mechanism brought about by a rigid labor market and exchange rate system. The paper`s policy recommendations include improving external financial links, continuing and accelerating the path of domestic financial deepening, giving very high priority to the reduction of the public debt burden problem, and addressing the fundamental incompatibility between labor market rigidities and a highly inflexible exchange rate system.

Suggested Citation

Caballero, Ricardo J., Structural Volatility in Argentina: A Policy Report (August 2000). IDB Working Paper No. 353, Available at SSRN: https://ssrn.com/abstract=1817221 or http://dx.doi.org/10.2139/ssrn.1817221

Ricardo J. Caballero (Contact Author)

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