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Contractionary devaluation and credit crunch: analysing Argentina
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Miller, Marcus, García Fronti, Javier I. and Zhang, Lei (2005) Contractionary devaluation and credit crunch: analysing Argentina. Working Paper. Coventry: University of Warwick. Centre for the Study of Globalisation and Regionalisation. Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation) (No.190).
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Official URL: http://www2.warwick.ac.uk/fac/soc/csgr/research/wo...
Abstract
Sharp economic contraction often follows currency devaluation in emerging markets - due mainly to liability dollarisation. Such adverse balance sheet effects play a key role in the well-known model of Aghio et al (2000), by reducing investment and future supply. We show how the prompt contraction of output can be accounted for by incorporating demand failure - due to a slow export response and a credit crunch. The resulting eclectic framework is used to study the collapse of the Argentine economy when Convertibility ended in 2002; and to see why efforts to imitate President Roosevelt by 'pesifying' the economy proved counter-productive.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HG Finance | ||||
Divisions: | Faculty of Social Sciences > Economics Faculty of Social Sciences > Centre for the Study of Globalisation and Regionalisation |
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Library of Congress Subject Headings (LCSH): | Financial crises, Devaluation of currency, Keynesian economics, Recessions, Credit control -- Argentina, Argentina -- Economic conditions -- 1983- | ||||
Series Name: | Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation) | ||||
Publisher: | University of Warwick. Centre for the Study of Globalisation and Regionalisation | ||||
Place of Publication: | Coventry | ||||
Official Date: | October 2005 | ||||
Dates: |
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Number: | No.190 | ||||
Number of Pages: | 39 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Funder: | Economic and Social Research Council (Great Britain) (ESRC) | ||||
Grant number: | RES-051-27-0125 (ESRC), RES-156-25-0032 (ESRC) |
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