Institutions, credibility and crisis: the inconsistencies of Argentine exchange rate policy (1991-2006)

Vol. 35 No. 1 (2015)

Jan-Mar / 2015
Published January 1, 2015
PDF-English
PDF-English

How to Cite

Cherny, Nicolás. 2015. “Institutions, Credibility and Crisis: The Inconsistencies of Argentine Exchange Rate Policy (1991-2006)”. Brazilian Journal of Political Economy 35 (1):95-113. https://centrodeeconomiapolitica.org/repojs/index.php/journal/article/view/216.

Institutions, credibility and crisis: the inconsistencies of Argentine exchange rate policy (1991-2006)

Nicolás Cherny
CONICET researcher based in the Political Science Department of the Gino Germani Research Institute of University of Buenos Aires.
Brazilian Journal of Political Economy, Vol. 35 No. 1 (2015), Jan-Mar / 2015, Pages 95-113

Abstract

The purpose of this article is twofold. The first is to explain the time inconsistencies of the convertibility regime that led to the 2001 crisis. The argument suggests that the credibility requirements for convertibility induced a dynamic of legal, fiscal, financial and external commitments that increased exit costs and time inconsistencies. The second objective is to explain the tensions of the floating regime that replaced convertibility in 2002. We describe the effects of a floating exchange rate on macroeconomic imbalance and the growing tension between competitiveness and inflation.

JEL Classification: E02; F32; O24.


Keywords: economic policy exchange rate crisis convertibility Argentina