Living and dying with hard pegs: the rise and fall of Argentina's currency board

The rise and fall of Argentina’s currency board illustrates the extent to which the advantages of hard pegs have been overstated. The currency board did provide nominal stability and boosted financial intermediation, at the cost of endogenous financial dollarization, but did not foster fiscal or mon...

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Autores principales: Levy Yeyati, Eduardo, Schmukler, Sergio, Torre, Augusto de la
Formato: Documento de trabajo acceptedVersion
Publicado: Universidad Torcuato Di Tella. Escuela de Negocios. Centro de Investigaciones en Finanzas (CIF) 2017
Materias:
Convertibilidad
Crisis monetaria
Recesión económica
Tipo de cambio
Acceso en línea:http://repositorio.utdt.edu/handle/utdt/6268
Aporte de:
Repositorio Digital Universidad Torcuato Di Tella de Universidad Torcuato Di Tella
id I57-R16320.500.13098-6268
record_format dspace
institution Universidad Torcuato Di Tella
institution_str I-57
repository_str R-163
collection Repositorio Digital Universidad Torcuato Di Tella
topic Convertibilidad
Crisis monetaria
Recesión económica
Tipo de cambio
spellingShingle Convertibilidad
Crisis monetaria
Recesión económica
Tipo de cambio
Levy Yeyati, Eduardo
Schmukler, Sergio
Torre, Augusto de la
Living and dying with hard pegs: the rise and fall of Argentina's currency board
description The rise and fall of Argentina’s currency board illustrates the extent to which the advantages of hard pegs have been overstated. The currency board did provide nominal stability and boosted financial intermediation, at the cost of endogenous financial dollarization, but did not foster fiscal or monetary discipline. The failure to adequately address the currency-growth-debt trap, into which Argentina fell at the end of the 1990s, precipitated a run on the currency and the banks, followed by the abandonment of the currency board and a sovereign debt default. The crisis can be best interpreted as a bad outcome of a high-stakes strategy to overcome a weak currency problem. To increase the credibility of the hard peg, the government raised its exit costs, which deepened the crisis once exit could no longer be avoided. But some alternative exit strategies would have been less destructive than the one adopted.
format Documento de trabajo
acceptedVersion
author Levy Yeyati, Eduardo
Schmukler, Sergio
Torre, Augusto de la
author_facet Levy Yeyati, Eduardo
Schmukler, Sergio
Torre, Augusto de la
author_sort Levy Yeyati, Eduardo
title Living and dying with hard pegs: the rise and fall of Argentina's currency board
title_short Living and dying with hard pegs: the rise and fall of Argentina's currency board
title_full Living and dying with hard pegs: the rise and fall of Argentina's currency board
title_fullStr Living and dying with hard pegs: the rise and fall of Argentina's currency board
title_full_unstemmed Living and dying with hard pegs: the rise and fall of Argentina's currency board
title_sort living and dying with hard pegs: the rise and fall of argentina's currency board
publisher Universidad Torcuato Di Tella. Escuela de Negocios. Centro de Investigaciones en Finanzas (CIF)
publishDate 2017
url http://repositorio.utdt.edu/handle/utdt/6268
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