Currency Devaluation and Its Effects on the Economy. Focus on Argentina.
| Currency devaluation and its effects on the economy | Focus on the Argentine economy |
Agustina DalFabbro, Michele Mottola, Giuseppe Merlino, Saskia Diehl
26.05.2012
|
Inhalt 1. Introduction 2 2. Convertibility and its problems in the 1999/2001 period 2 1.1 Previous Devaluation Process in Argentina 2 2. First moments of devaluation 3 2.1 Fixed exchange rate vs. floating exchange rate regimes 3 2.2 Two types of exchange rates and free floating currency 5 2.2 Free floating currency 6 3. Effects of Devaluation process on 6 3.1 Trade Balance 6 3.2 Productive capacity 6 3.3 Salaries 6 3.4 National Accounts 6 4. Conclusion 6 5. Literature 7
1. Introduction
Stable currency exchange rate regimes are a key component to stable economic growth (http://www.policyarchive.org/handle/10207/bitstreams/1311.pdf)
2. Convertibility and its problems in the 1999/2001 period
1.1 Previous Devaluation Process in Argentina
Three main large devaluation episodes prior to the monetary reform of 1991 can be identified in the graph: 1975-1976 (the so called “Rodrigazo”), 1982-1984 (the “Post Malvinas War” monetary collapse) and 1989-1990 (the “Hyperinflation”). (http://www.cavallo.com.ar/wp-content/uploads/2012/05/Devaluation-and-Inflation-.pdf)
2. First moments of devaluation
Basically you can distinguish three half-year periods centered on the political and financial collapse at the end of 2001 namely: Precollapse (to September, 2001); Collapse (October 2001 to March 2002); and Depression (from April 2002).
This section will focus on the end of the Collapse and the beginning and ongoing Depression.
As earlier mentioned Argentina applied a currency board at the beginning of the 90’s which pegged the peso to the dollar and formed a fixed exchange rate. After the Crisis of Argentina had begun they had to decide how they can diminish the effect of the emerging depression. In December 2001 Argentina officially
Agustina DalFabbro, Michele Mottola, Giuseppe Merlino, Saskia Diehl
26.05.2012
|
Inhalt 1. Introduction 2 2. Convertibility and its problems in the 1999/2001 period 2 1.1 Previous Devaluation Process in Argentina 2 2. First moments of devaluation 3 2.1 Fixed exchange rate vs. floating exchange rate regimes 3 2.2 Two types of exchange rates and free floating currency 5 2.2 Free floating currency 6 3. Effects of Devaluation process on 6 3.1 Trade Balance 6 3.2 Productive capacity 6 3.3 Salaries 6 3.4 National Accounts 6 4. Conclusion 6 5. Literature 7
1. Introduction
Stable currency exchange rate regimes are a key component to stable economic growth (http://www.policyarchive.org/handle/10207/bitstreams/1311.pdf)
2. Convertibility and its problems in the 1999/2001 period
1.1 Previous Devaluation Process in Argentina
Three main large devaluation episodes prior to the monetary reform of 1991 can be identified in the graph: 1975-1976 (the so called “Rodrigazo”), 1982-1984 (the “Post Malvinas War” monetary collapse) and 1989-1990 (the “Hyperinflation”). (http://www.cavallo.com.ar/wp-content/uploads/2012/05/Devaluation-and-Inflation-.pdf)
2. First moments of devaluation
Basically you can distinguish three half-year periods centered on the political and financial collapse at the end of 2001 namely: Precollapse (to September, 2001); Collapse (October 2001 to March 2002); and Depression (from April 2002).
This section will focus on the end of the Collapse and the beginning and ongoing Depression.
As earlier mentioned Argentina applied a currency board at the beginning of the 90’s which pegged the peso to the dollar and formed a fixed exchange rate. After the Crisis of Argentina had begun they had to decide how they can diminish the effect of the emerging depression. In December 2001 Argentina officially