Crisis In Argentina

Research Project genus Argentinas stinting crisis of 2001 - Causes and Consequences Argentina, once the darling of Latin America, has nowadays become its liability. During the first half of the 1990s it grew 45 % while curtailing decades of hyperinflation. The arena made major changes to its alien enthronisation insurance policy, becoming a favourite among emerging market investors. Despite early gains, Argentina is once again in a deep economical crisis-its fourth in the last two decades. The country is in its third year of recession, unemployment stands at 15%, unlike investment is wavering, and Argentina is struggling to pay back $124-billion in foreign debt.

What went wrong? Todays crisis can be parti bothy attributed to the monetary policy introduced in 1991 by Domingo Cavallo, the sparing minister, who pegged the peso one-to-one with the U.S. long horse. temporary hookup it succeeded in curbing inflation and providing price stability, it did not set up the intended platform from which Argentina could build. The Argentine bank connected to never printing unbacked pesos. This solved Argentinas inflation problems and investors poured notes into the country. From 1991 to 1996, Argentine per capita GDP grew at an average rate of 4.8% (Ian Campbell). determine stability was achieved but at the expense of Argentinas growth.



Pegging its currency to the long horse had an impact on the economys ability to compete and grow; consequently, the countrys economy took a turn for the worse.

The Argentine economy is now in a deep crisis without a clear road to economic recovery. Unless its economy can grow quickly, the government may take up to devalue its currency - that would entail default on foreign and domestic debt and the imminent withdraw of foreign investments in all emerging markets.

During the late 1990s the growth in technology caused the U.S. dollar to appreciate relative to other currencies as money...

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