16 Pages Posted: 10 Mar 2013
Date Written: February 6, 2013
The end of convertibility and a subsequent default, confiscation of deposits and devaluation is the path that Paul Krugman proposes for several countries as a solution to the European crisis. We show that Krugman’s reference to Argentine experience is misleading and dangerous. He underestimates the crisis of 2001-2002 and overestimates economic growth achieved in the period 2003-2011. Any country following this example will find it unattractive due to the difficulties it is bound to face with economic growth, control of public spending, and inflation.
Keywords: Argentina, Menemism, Kirschnerism, unsustainable growth
JEL Classification: E62, E65, N16
Suggested Citation: Suggested Citation