It takes more than two to tango: Cry, but not for Argentina, nor for the holdouts

Jeffrey Frankel 22 July 2014

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US federal courts have ruled that Argentina is prohibited from making payments to fulfil 2005 and 2010 agreements with its creditors to restructure its debt, so long as it is not also paying the few creditors that have all along been holdouts from those agreements. The judgment is likely to stick because the judge (Thomas Griesa, in New York) told American banks on 27 June that it would be illegal for them to transfer Argentina’s payments to the 92% of creditors who agreed to be restructured, and because the US Supreme Court in June declined to review the lower court rulings.

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Topics:  Development Global governance

Tags:  US, sovereign debt, Argentina

External integration, structural transformation, and economic development: Evidence from Argentina 1870-1914

Pablo Fajgelbaum, Stephen Redding 12 July 2014

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External economic integration is often argued to be an important driver of economic development, as it raises income through specialisation in comparative-advantage sectors, provides low-cost access to imported goods, and shapes the pattern of structural transformation from agricultural into non-agricultural activities. These relationships are typically examined at the aggregate level, implicitly treating each country as a point in space.

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Topics:  Development Economic history International trade

Tags:  integration, comparative advantage, trade costs, Argentina, specialisation

Sustaining trade reform: Institutional lessons from Peru and Argentina

Elías A. Baracat, J. Michael Finger, Julio J. Nogués, Raúl León Thorne 28 October 2013

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Beyond removing restrictions, trade reform in Latin American in the 1980s and 1990s was also an attempt to reform the culture of policy management, and in some countries to introduce an optimistic, ‘Asian’ perspective into trade politics. In Peru, reforms have been sustained over several changes of president. In contrast, Argentina has introduced multiple restrictions and has reverted to the ‘off-the-books’ forms of policymaking that the adoption of GATT/WTO standards by previous the leadership tried to eliminate.

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Topics:  Institutions and economics International trade

Tags:  WTO, trade liberalisation, Latin America, reform, Argentina, Peru

Greece’s predicament: Lessons from Argentina

Mickey Levy, Peter Kretzmer 16 May 2012

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Argentina’s deepening recession, run on banks and associated social unrest in 2000-1 stemming from its own policy mistakes forced it to default and abandon its US dollar currency peg. The Argentine peso depreciated dramatically. Inflation soared temporarily, battering standards of living. But the default and currency depreciation set the stage for a turnaround which, aided by a fortuitous bounce in commodity prices, spurred a strong export and investment-led economic rebound.

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Topics:  Europe's nations and regions Monetary policy

Tags:  default, Greece, Argentina, Eurozone crisis

Argentina's latest looming crisis

Eduardo Levy Yeyati 07 November 2011

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Argentina tends to elicit extreme views from economic analysts and commentators, ranging from reborn enthusiasts that marvel at the country`s unexpected performance to the point of promoting an “Argentine solution” to European problems, to sceptics that continue to expect a sudden stop to the ongoing bonanza. However, as Paul Krugman (an enthusiast) recently pointed out (Krugman 2011), a “consistently negative tone of reporting on Argentina” seems to be the rule. “Betting on another Argentine default may be going too far.

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Topics:  Global crisis International finance

Tags:  Argentina

How Argentina left its Eurozone

Eduardo Levy Yeyati 02 October 2011

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The European predicament is:

  • Financial (large debt stocks); and
  • Real (large fiscal and current-account flow gaps).

A solution to just one of these is likely to be inadequate. A solution, for example, that focuses solely on debt restructuring would be incomplete if not complemented with a plan to recover price competitiveness and growth to fix the real problem.

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Topics:  EU policies Europe's nations and regions Monetary policy

Tags:  Argentina, devaluation, Eurozone crisis, fiscal union

Argentina and Greece: More similarities than differences in the initial conditions

Miguel Kiguel 16 August 2011

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The parallels between the sagas of Argentina and the Eurozone are important and instructive. Cavallo (2011) has broached the issues; here I offer an alternate view of the lessons for Europe. This is based on my somewhat different view of the key flaws that led to the demise of Argentina’s experiment with a currency board.

While the analogy with Argentina in its turn-of-the-century crisis is closest with respect to Greece, aspects of the fatal flaws that brought down Argentina’s currency regime are shared by all of the Eurozone members.

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Topics:  Europe's nations and regions Global crisis

Tags:  Greece, Argentina, Eurozone crisis

Are capital controls effective?

Eduardo Levy Yeyati 20 January 2011

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“Not only are they ineffective but, in addition, they raise domestic interest rates.” This type of internally inconsistent commentary is not unusual when discussing capital controls – a subject marked with strong beliefs and weak data. Now that the G20 has sanctioned capital controls in Seoul under the umbrella of macro-prudential policies, it is a good time to revisit the subject of controls in a dispassionate way (G20 2010).1

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Topics:  International finance

Tags:  US, protectionism, capital controls, Chile, Argentina

Argentina’s border emergency-kit in times of global crisis: In case of fire, break the glass

Demián Dalle, Federico Lavopa 11 January 2011

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After the outbreak of the global financial and economic crisis in mid-2008, unilateral and discriminatory trade measures multiplied in number. Developed countries put in place gigantic stimulus packages, some high- and middle-income countries set up catchall tariff and non-tariff measures, while those that had been applying import-duty rates below bound levels raised them up to bound ceilings.

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Topics:  International trade

Tags:  protectionism, Global Trade Alert, Argentina

Leaving the euro: What’s in the box?

Eduardo Levy Yeyati, Mario I. Blejer 21 July 2010

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The turmoil in Europe is not abating. True, some calm has returned to the markets after the initial storm, but tenacious misgivings about the euro project in general are growing, driven by disenchantment with the policy responses and a realisation of the magnitude of the problem.

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Topics:  Europe's nations and regions Exchange rates

Tags:  currency crisis, Fiscal crisis, Argentina, Eurozone crisis

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