Working Paper: NBER ID: w2378
Authors: Rudiger Dornbusch; Juan Carlos De Pablo
Abstract: The paper reviews the Argentine debt experience in the past ten years. The emphasis is on the interaction between relative prices, financial instability, budget .deficits, inflation and debt accumulation. A longer run perspective shows that the continuing fiscal problems have stood in the way of investment and growth.
Keywords: Argentina; Debt; Macroeconomic Instability; Inflation; Fiscal Policy
JEL Codes: F34; E62; H63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Argentina's fiscal problems (H69) | macroeconomic instability (E60) |
| budget deficits (H62) | inflation (E31) |
| inflation (E31) | debt accumulation (H63) |
| poor fiscal management (H69) | overvaluation of currency (F31) |
| poor fiscal management (H69) | capital flight (F21) |
| overvaluation of currency (F31) | cycle of increasing debt (E32) |
| capital flight (F21) | cycle of increasing debt (E32) |
| policy decisions during the Martinez de Hoz period (E65) | accumulation of external debt (F34) |
| policy decisions during the Martinez de Hoz period (E65) | financial crises (G01) |
| accumulation of external debt (F34) | deterioration of financial structure (G32) |