demonstrate , using supply and demand curves, whyArgentina had to give up its fixed exchange rate in...

Question

demonstrate , using supply and demand curves, whyArgentina had to give up its fixed exchange rate in 2001. two page paper

Robert · Accepted Answer

http://www.bis.org/publ/bppdf/bispap24h.pdf
http://ucatlas.ucsc.edu/sap/argentina_crisis.php
http://www.webasa.org/Pubblicazioni/Lucchin_2002_3.pdf
The Argentina crisis of 2001-2002 brought economic, social and political crisis, from which the economy took years to come oit. It exemplifies the case of a successful developing economy that went into a crisis due to faulty exchange rate regime. Before the crisis the economy was heralded as the fastest growing economy in Latin America.  IT followed IMF diktats and was a major destination for international financial flows.
Through the 1980s and early 1990's, Argentina had a currency board on the advice from the IMF. The peso was pegged at $1(1peso for $1). This exchange rate was aimed at stabilizing the economy which had seen hyperinflation of up to 200% in recent past.  This policy essentially made the peso and dollar interchangeable.  
This fixed rate caused the peso to increase in value in line with the rise in value of the $, as they were both interchangeable easily.

demonstrate , using supply and demand curves, whyArgentina had to give up its fixed exchange rate in 2001. two page paper

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment