ARGENTINA’S LONG HISTORY OF (ECONOMIC) UNCERTAINTY

Year 2017, Volume: 6 Issue: 2, 13 - 24, 01.05.2017

Cecilia Rumi

Abstract

Instability and uncertainty have been the hallmark of Argentina's political economy throughout its history. Volatility in GDP inflation, the exchange rate, the terms of trade, and capital flows characterizes the burden that Argentines— ordinary citizens, investors, and policymakers—have had to endure for as long as anyone can remember. The internal design of monetary, financial, and capital-market institutions has made possible a 13-zero depletion of the currency and several confiscations of bank deposits. Argentine fiscal institutions have long been partial to short-term, pro-cyclical planning. Self-centered discretion has been the rule, with complete disregard for the huge costs created by uncertainty. Is there any way for Argentina to rid itself of this disastrous tendency and put itself on a path to sustainable growth and improved welfare?

Keywords

Argentina, uncertainty, fiscal deficits, institutions

Thanks

This paper was prepared for the Turkish Economic Association’s 19th National Economic Symposium on “Economic Decisions and Policies under Uncertainty,” held in Kyrenia, November 3-4, 2017. I would like to thank Prof. Dr. Ricardo López Murphy for his valuable insights and Prof. Dr. Ercan Uygur for his invitation and enriching comments. The views expressed and any errors are my own.

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