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The impact of the financial crisis on the global economy
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The Argentina debt affected the country between the late 90’s to the early 2000’s and can be attributed to misdiagnosis and ineffective policy. During this time the IMF and Argetina’s government worked closely together. Previous to the crisis Argentina had been celebrated for its economic policies and growth. The government worked to put in place conservative economic policy, including the privatization of companies, looser trade regulations, among other conservative changes. Economic growth in that period appears to have been in large part the result of increasing amount of international debt. Before the end of the 90’s, things began to fall apart.
The crisis can be traced back to the 80’s, where the country experienced extreme hyperinflation. The currency inflated at over 5000% this was during the presidency of Carlos Menem and, his finance minister, Domingo Cavallo who attempted three ways to limit inflation. The first was a stabilization act with the backing of a large private firm; the second attempt was to buy up certificates of deposit into government bonds (Nataraj & Sahoo 2003). After the first two methods failed the third option was introduced, this was to peg the argentine peso to the US dollar. To fixate the exchange rate, the currency board kept up dollar reserves, and could not change the supply of pesos without the same change in dollars as well (Sergio L., Eduardo, & Augusto 2003). By the mid-1990s, inflation had vanished but the government were unable to alter many of the concretionary policies that stabilized inflation yet hurt growth. When debt crisis began to develop, the government could not expand the money supply as a means of stimulating the economy, resulting in stagflation in the 90’s (Macewen 200...
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IMF. The IMF and Argentina, 1991–2001. Rep. International Monetary Fund: Independent Evaluation Office, 2004. Web. 24 Apr. 2012. .
Krueger, Anne. "Crisis Prevention and Resolution: Lessons from Argentina." Speech. "The Argentina Crisis" Cambridge, Cambridge. 17 July 2002. IMF. Web. 23 Apr. 2012. .
Macewan, Arthur. "Economic Debacle In Argentina: The IMF Strikes Again." Foreign Policy in Focus Jan. 2002, Latin America & Caribbean sec. Print.
Nataraj, Geethanjali, and Pravakar Sahoo. "Argentina's Crisis: Causes and Consequences." Economic and Political Weekly 38.18 (2003). Print.
Paddock, John V. "IMF Policy and the Argentine Crisis." The University of Miami Inter-American Law Review 34.1 (2003): 155-87. Print.
Instead of the current administration making a swift and decisive action to deal with these insolvent institutions, there were many bureaucratic attempts to delay action so that the problems would not become a polit...
Part I: “Consensus in Argentine Society and the Rise of Perón”. Chapter one, “ The Crisis of the Liberal Consensus” begins explaining the low participation of the Argentinean population in the government due to electoral fraudulence and intimidation. Then, he goes on to detailed how the democratic liberalism governmental system was threatened by the elites of Argentina because they fear the possible loss of their power from the new sectors that were rising. After, the author expressed that the
Argentina, which was soon to become the economic powerhouse, quickly descends into a ghost town of abandoned factories and mass unemployment. President Carlos Menem transformed Argentina by selling out every public asset he could find; he privatized factories, and created many corporate handouts. The nation approved of Menem’s changes, and Washington said “This is the best thing ever” (The Take) What the citizens didn’t realize is that by transforming the nation this way, Menem was creating a capitalist wild west. This caused more than half the people to live under the poverty line, and they were at the point where being offered food for pay was the citizen’s only option.
This paper argues that the Mexican peso crisis of December 20 should have been expected and foreseeable. In the year preceding the crisis, there were several indicators suggesting that the Mexican economy and peso were already under extreme pressure. The economy bubble was ballooning to burst so much so that it was simply a crisis waiting to happen.
Since the 1970s, Venezuela has gone from being South America’s richest nation into a nouveau-poor society in search of an identity. Once known as the Saudis of the West, Venezuelans have seen their economic fortunes decline in exact proportion to the general fall in world oil prices. Even so, Venezuela’s many problems were hidden from view until relatively recently, when severity measures heralded the sort of economic crises so painfully familiar to other Latin American countries. Runaway inflation, currency devaluations and even food riots have marked this new phase in Venezuelan history, to which the country is still trying to adjust.
Glusing, Jens. "Venezuela President Maduro Faces Economic Distress and Protests." SPIEGEL ONLINE. Der Spiegel, 26 Feb. 2014. Web. 28 Mar. 2014.
Jorge Videla was the leader of the military-run government. At the time, it was very easy for Videla to seize power because of the highly unstable condition that Argentina was in, and had been in for decades. In September of 1955 all three branches of the military revolted and forced the president, Juan Perón, into exile. Eleven years later, in 1966, a new leader, Juan Carlos Ongania, imposed the military rule again only to have the former president, Perón, return in 1973, and ...
By the fall of 1981, the Argentinean government under the leadership of General Galtieri and the military junta was experiencing a significant decrease of power. Economical...
Massachusetts Institute of Technology. (2000). The IMF and the World Bank: puppets of the neoliberalism onslaught. Retrieved April 05, 2014, from MIT website: http://www.mit.edu/~thistle/v13/2/imf.html
Truman, Edwin M. . "The Mexican Peso Crisis: Implications for International Finance." Federal Reserve Bulletin 0 (1996): 199-209.
"The Latin American Debt Crisis In Historical Perspective." Policy Dialogue. Columbia University, n.d. -. Web. The Web.
This paper provides an overview of the crisis, outlines the major causes of the crisis, examine alternative solutions to the problem
The IMF plays a pivotal role in the international economy system. As its initial goal about reconstructs world’s international payment system, such as contributes to surveillance of the global economy, to stabilize exchange rates, to lend money to help countries to resolve emergency situation but with certain conditions and should pay back in a short time. The IMF has done a large number of things to help the world economy, not only in the western countries, but in many developing countries as well.
IMF Staff Position Note. (2009, March 6). The Case for Global Fiscal Stimulus. Retrieved from http://www.imf.org/external/pubs/ft/spn/2009/spn0903.pdf
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.