Argentina Crisis Of Argentina 's Emerging Economy

3468 Words May 6th, 2015 14 Pages

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…………………………………………...………………………………..5
Full fledged financial crisis………………………………………………………..…….8
Results……………………………………………………………………………………………..9
Closing Remarks ……………………………………………………………………………..….10

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. This lead interest rates to exceed trade surpluses, unemployment to increase and higher 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 could not continue to fund its debts. The cost of utility increased significantly as real wages fell by almost half, increasing uncertainty across the country and causing inflation to increase from “200% a year in 1988 to 5,000% in 1989” (Brooke).
However, the economy improved once elected…
Open Document