The "Argentine disappointment"—why Argentina persistently failed to achieve sustained economic stability during the twentieth century—is an issue that has mystified scholars for decades. In Straining the Anchor, Gerardo della Paolera and Alan M. Taylor provide many of the missing links that help explain this important historical episode. Written chronologically, this book follows the various fluctuations of the Argentine economy from its postrevolutionary volatility to a period of unprecedented prosperity to a dramatic decline from which the country has never fully recovered. The authors examine in depth the solutions that Argentina has tried to implement such as the Caja de Conversión, the nation's first currency board which favored a strict gold-standard monetary regime, the forerunner of the convertibility plan the nation has recently adopted.
With many countries now using—or seriously contemplating—monetary arrangements similar to Argentina's, this important and persuasive study maps out one of history's most interesting monetary experiments to show what works and what doesn't.
Product Details
- Hardcover: 298 pages
- Publisher: University Of Chicago Press; 1 edition (December 1, 2001)
- Language: English
- ISBN-10: 0226645568
- ISBN-13: 978-0226645568
- Product Dimensions: 9.2 x 6.3 x 0.8 inches
- Shipping Weight: 1.2 pounds
Customer Reviews
When history fruitfully enlightens the current debate
Very recommendable either for a Ph.D. student interested in the history of emerging markets crisis or the scholar aiming to tell her students how modern theory and empirical tests are applicable to some stories like the Argentine one.
Not only is this book a magnific contribution to understand the monetary and banking history of Argentina, but also a contribution that informs present-day debates in macroeconomics (e.g. the choice of optimal exchange rate regime, various generations of financial and currency crisis, bank runs). The authors make a significant effort to formalise major stylised facts across different crisis episodes, through the lens of modern monetary and banking theory. Moreover, they offer a fresh look at issues concerning crisis management and resolution and policy evaluation in the “first” era of economic globalisation (1880-1914) as well as during the interwar period all the way down to the 1930′s depression.
Modern tools help test the hypothesis laid out generally at the beginning of the theoretical framework introduced in each chapter. Ranging from accounting exercises (fiscal solvency, banking balance sheets, as a few examples)to cutting-edge time series econometric modelling, the evidence found by the authours sheds light on crucial empirical issues. Some examples may illustrate this point:
a) The Purchasing Power Parity assumption (PPP, in a single equation cointegrating framework);
b) Money supply and demand, and exchange rate determinants in 1884-1913;
c) The Internal-External Convertibility dynamics (phase diagram, Vector Error Correction Model estimation)
Finally, the lessons drawn by Della Paolera and Taylor are, in my view, very telling to the way Argentina got into the path to the collapse of the currency board 1991-2001.
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