Argentina Crisis Of Argentina 's Emerging Economy

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Table of Contents
Introduction
Argentina before its Great Depression of 1998-2002……………………………...…1

Stages of a financial crisis of Argentina’s emerging economy
Initiation of the crisis……………………………………………………..………………2
Currency crisis…………………………………………...………………………………..4
Full fledged financial crisis………………………………………………………..…….6
Results……………………………………………………………………………………………..6
Closing Remarks ………………………………………………………………………………….6

Introduction
Argentina before its Great Depression in 1998-2002

Prior to becoming a democratic country, Argentina was exposed to a military dictatorship. Under this regime the Economy Minister was Jose Alfredo Martinez de Hoz whose neoliberal economic platform sided along to anti-labor, monetarist policies and financial liberalization. As a result of this regime, Argentina accumulated a $45 billion foreign debt. As a result interest rates exceeded trade surpluses, unemployment increased and there were high inflation rates. In 1985 a democracy was reestablished once President Raul Alfonsin was elected. Alfonsin’s government intended to stabilize the economy by establishing the austral, a new currency. However, this was unsuccessful because the government couldn’t continue to fund its debts. The cost of utility increased significantly as real wages fell by almost half. As a result uncertainty increased across the country, inflation increased from 200% a year in 1988 to 5,000% in 1989 (Brooke).
However, the economy improved once elected President
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