Macroeconomic events before and after Argentina's 2001-2002 currency crisis
Summary :
Table of Contents
- Introduction.
- Discussion.
- The two potential risks that were underestimated during the convertibility plan.
- Introduction of a revised organic law.
- The fall of the economy.
- Conclusion.
- References.
Abstract
In practice economical balance is unachievable. Stabilization conditions that many scholars and economists claim are but fleeting status of the economy. Some of the major crises around the world including the US stock market collapse, Asian financial crisis, Latin financial crisis and recently the Argentinean banking crisis are examples the statement. Theories in economics indicate that the result of such financial collapse stem from several factors. Any one factor can affect the other such as the determination of nominal exchange rate (NER) or the real exchange rate (RER); production possibility frontier and its impact on external balance of payments; overvaluation of goods in the factor markets; and current account destabilization etc (Li 2005). Any kind of instability in these factors as a result of government policies can have a catalytic effect on the economy.
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