Restoring Economic Growth in Argentina
The author reviews the debate on the causes of Argentina�s economic collapse in late 2001 and 2002 and examines the measures needed to help restore sustainable growth. Some analysts stress fiscal imbalances, others overvaluation of the peso under t...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2003/10/2693690/restoring-economic-growth-argentina http://hdl.handle.net/10986/18043 |
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okr-10986-18043 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ECONOMIC GROWTH FISCAL POLICY PESO ARGENTINO CURRENCY DEVALUATION CURRENCY FLUCTUATION EXTERNAL SHOCKS HYPERINFLATION TAX COLLECTION FISCAL SUSTAINABILITY INTERGOVERNMENTAL FISCAL RELATIONS INTERGOVERNMENTAL TRANSFER OF FUNDS REVENUE SHARING BANKING REFORMS TARIFF STRUCTURES FOREIGN DIRECT INVESTMENTS DEBT RESTRUCTURING CONDITIONALITY (FINANCE) ACCOUNTING BALANCE SHEETS BALANCED BUDGETS BANK DEPOSITS BANKING SECTOR BANKING SYSTEM BASELINE LEVELS BORROWING BUDGET DEBT CAPITA GROWTH CAPITAL FLOWS CAPITAL MARKETS CENTRAL BANK CENTRAL BANK LENDING CHECKING CLOSED ECONOMY COLLATERALIZATION COMPETITIVENESS CONSOLIDATION DEBT DEBT RESTRUCTURING DEFICIT TARGET DEFICITS DEFLATION DEREGULATION DEVALUATION DOMESTIC PRICE ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC RECOVERY ECONOMIC STRUCTURE ECONOMISTS ELASTICITY EMERGING MARKET ECONOMIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORTS EXTERNAL SHOCK EXTERNAL SHOCKS FACE VALUE FINANCIAL SECTOR FISCAL ADJUSTMENT FISCAL BALANCE FISCAL DEFICIT FISCAL DEFICITS FISCAL PERFORMANCE FISCAL REFORM FISCAL STABILITY FISCAL SURPLUS FISCAL SUSTAINABILITY FIXED EXCHANGE RATE FREE TRADE GDP GDP DEFLATOR GOVERNMENT BONDS GOVERNMENT DEBT HUMAN DEVELOPMENT INCOME INCOME TAXES INDEXATION INFLATION INTEREST COSTS INTEREST RATE INTEREST RATES INTERNATIONAL MONETARY FUND LEGISLATION LENDING RATES MARKET PRICES MARKET VALUE MIDDLE INCOME COUNTRIES MONETARY EXPANSION MONETARY POLICY MONEY SUPPLY NET WORTH OIL OVERVALUATION PENSIONS PER CAPITA INCOME PRESENT VALUE PRICE INCREASES PRICE STABILITY PRIVATIZATION PROPERTY RIGHTS PROVINCIAL SPENDING PUBLIC DEBT PUBLIC SECTOR PUBLIC SECTOR WAGES PUBLIC WORKS PUBLIC WORKS PROJECTS PURCHASING POWER REAL EXCHANGE RATE REAL GDP REAL GROWTH REAL TERMS RECESSION REVENUE SHARING SOCIAL SECURITY SOVEREIGN RISK TAX TAX REVENUE TAX REVENUES TREASURY VALUE ADDED WAGES ACCOUNTING CONDITIONALITY |
| spellingShingle |
ECONOMIC GROWTH FISCAL POLICY PESO ARGENTINO CURRENCY DEVALUATION CURRENCY FLUCTUATION EXTERNAL SHOCKS HYPERINFLATION TAX COLLECTION FISCAL SUSTAINABILITY INTERGOVERNMENTAL FISCAL RELATIONS INTERGOVERNMENTAL TRANSFER OF FUNDS REVENUE SHARING BANKING REFORMS TARIFF STRUCTURES FOREIGN DIRECT INVESTMENTS DEBT RESTRUCTURING CONDITIONALITY (FINANCE) ACCOUNTING BALANCE SHEETS BALANCED BUDGETS BANK DEPOSITS BANKING SECTOR BANKING SYSTEM BASELINE LEVELS BORROWING BUDGET DEBT CAPITA GROWTH CAPITAL FLOWS CAPITAL MARKETS CENTRAL BANK CENTRAL BANK LENDING CHECKING CLOSED ECONOMY COLLATERALIZATION COMPETITIVENESS CONSOLIDATION DEBT DEBT RESTRUCTURING DEFICIT TARGET DEFICITS DEFLATION DEREGULATION DEVALUATION DOMESTIC PRICE ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC RECOVERY ECONOMIC STRUCTURE ECONOMISTS ELASTICITY EMERGING MARKET ECONOMIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORTS EXTERNAL SHOCK EXTERNAL SHOCKS FACE VALUE FINANCIAL SECTOR FISCAL ADJUSTMENT FISCAL BALANCE FISCAL DEFICIT FISCAL DEFICITS FISCAL PERFORMANCE FISCAL REFORM FISCAL STABILITY FISCAL SURPLUS FISCAL SUSTAINABILITY FIXED EXCHANGE RATE FREE TRADE GDP GDP DEFLATOR GOVERNMENT BONDS GOVERNMENT DEBT HUMAN DEVELOPMENT INCOME INCOME TAXES INDEXATION INFLATION INTEREST COSTS INTEREST RATE INTEREST RATES INTERNATIONAL MONETARY FUND LEGISLATION LENDING RATES MARKET PRICES MARKET VALUE MIDDLE INCOME COUNTRIES MONETARY EXPANSION MONETARY POLICY MONEY SUPPLY NET WORTH OIL OVERVALUATION PENSIONS PER CAPITA INCOME PRESENT VALUE PRICE INCREASES PRICE STABILITY PRIVATIZATION PROPERTY RIGHTS PROVINCIAL SPENDING PUBLIC DEBT PUBLIC SECTOR PUBLIC SECTOR WAGES PUBLIC WORKS PUBLIC WORKS PROJECTS PURCHASING POWER REAL EXCHANGE RATE REAL GDP REAL GROWTH REAL TERMS RECESSION REVENUE SHARING SOCIAL SECURITY SOVEREIGN RISK TAX TAX REVENUE TAX REVENUES TREASURY VALUE ADDED WAGES ACCOUNTING CONDITIONALITY Cline, William R. Restoring Economic Growth in Argentina |
| geographic_facet |
Latin America & Caribbean ARGENTINA |
| relation |
Policy Research Working Paper;No. 3158 |
| description |
The author reviews the debate on the
causes of Argentina�s economic collapse in late 2001 and
2002 and examines the measures needed to help restore
sustainable growth. Some analysts stress fiscal imbalances,
others overvaluation of the peso under the convertibility
plan, and others external shocks. Cline judges that all
three contributed substantially, but that it was their
inflammatory interaction with domestic political unraveling
that forced the bad-equilibrium outcome. He reviews the
nascent recovery since the second half of 2002 and the
important success of avoiding hyperinflation. Looking
forward, the author�s analysis underscores the importance of
strengthening fiscal performance, in part by increasing
relatively low collections of value added taxes. He stresses
the need for reform of the system of revenue sharing with
the provinces; the importance of strengthening the banking
system, which was severely weakened by asymmetric conversion
of assets and liabilities from dollars to pesos; and the
need to arrive at equitable restructuring of utility tariffs
to reestablish confidence of foreign direct investors in the
rules of the game. Restructuring government debt is also
central to restoring growth. A simple model indicates that a
relatively ambitious target for the primary fiscal surplus
and a restricted set of senior-status debt will be needed to
limit the haircut on junior debt to amounts compatible with
longer-term creditor perceptions of fairness. The author
also considers the new dynamics of bargaining with the
International Monetary Fund (IMF). He judges that although
conditionality is arguably appropriately less stringent as
only rollover is involved, and despite the large outstanding
debt to the IMF, there are limits to how lenient the Fund
can and should be in key areas with potential for setting
international precedents. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Cline, William R. |
| author_facet |
Cline, William R. |
| author_sort |
Cline, William R. |
| title |
Restoring Economic Growth in Argentina |
| title_short |
Restoring Economic Growth in Argentina |
| title_full |
Restoring Economic Growth in Argentina |
| title_fullStr |
Restoring Economic Growth in Argentina |
| title_full_unstemmed |
Restoring Economic Growth in Argentina |
| title_sort |
restoring economic growth in argentina |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2003/10/2693690/restoring-economic-growth-argentina http://hdl.handle.net/10986/18043 |
| _version_ |
1764438730179870720 |
| spelling |
okr-10986-180432021-04-23T14:03:41Z Restoring Economic Growth in Argentina Cline, William R. ECONOMIC GROWTH FISCAL POLICY PESO ARGENTINO CURRENCY DEVALUATION CURRENCY FLUCTUATION EXTERNAL SHOCKS HYPERINFLATION TAX COLLECTION FISCAL SUSTAINABILITY INTERGOVERNMENTAL FISCAL RELATIONS INTERGOVERNMENTAL TRANSFER OF FUNDS REVENUE SHARING BANKING REFORMS TARIFF STRUCTURES FOREIGN DIRECT INVESTMENTS DEBT RESTRUCTURING CONDITIONALITY (FINANCE) ACCOUNTING BALANCE SHEETS BALANCED BUDGETS BANK DEPOSITS BANKING SECTOR BANKING SYSTEM BASELINE LEVELS BORROWING BUDGET DEBT CAPITA GROWTH CAPITAL FLOWS CAPITAL MARKETS CENTRAL BANK CENTRAL BANK LENDING CHECKING CLOSED ECONOMY COLLATERALIZATION COMPETITIVENESS CONSOLIDATION DEBT DEBT RESTRUCTURING DEFICIT TARGET DEFICITS DEFLATION DEREGULATION DEVALUATION DOMESTIC PRICE ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC RECOVERY ECONOMIC STRUCTURE ECONOMISTS ELASTICITY EMERGING MARKET ECONOMIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORTS EXTERNAL SHOCK EXTERNAL SHOCKS FACE VALUE FINANCIAL SECTOR FISCAL ADJUSTMENT FISCAL BALANCE FISCAL DEFICIT FISCAL DEFICITS FISCAL PERFORMANCE FISCAL REFORM FISCAL STABILITY FISCAL SURPLUS FISCAL SUSTAINABILITY FIXED EXCHANGE RATE FREE TRADE GDP GDP DEFLATOR GOVERNMENT BONDS GOVERNMENT DEBT HUMAN DEVELOPMENT INCOME INCOME TAXES INDEXATION INFLATION INTEREST COSTS INTEREST RATE INTEREST RATES INTERNATIONAL MONETARY FUND LEGISLATION LENDING RATES MARKET PRICES MARKET VALUE MIDDLE INCOME COUNTRIES MONETARY EXPANSION MONETARY POLICY MONEY SUPPLY NET WORTH OIL OVERVALUATION PENSIONS PER CAPITA INCOME PRESENT VALUE PRICE INCREASES PRICE STABILITY PRIVATIZATION PROPERTY RIGHTS PROVINCIAL SPENDING PUBLIC DEBT PUBLIC SECTOR PUBLIC SECTOR WAGES PUBLIC WORKS PUBLIC WORKS PROJECTS PURCHASING POWER REAL EXCHANGE RATE REAL GDP REAL GROWTH REAL TERMS RECESSION REVENUE SHARING SOCIAL SECURITY SOVEREIGN RISK TAX TAX REVENUE TAX REVENUES TREASURY VALUE ADDED WAGES ACCOUNTING CONDITIONALITY The author reviews the debate on the causes of Argentina�s economic collapse in late 2001 and 2002 and examines the measures needed to help restore sustainable growth. Some analysts stress fiscal imbalances, others overvaluation of the peso under the convertibility plan, and others external shocks. Cline judges that all three contributed substantially, but that it was their inflammatory interaction with domestic political unraveling that forced the bad-equilibrium outcome. He reviews the nascent recovery since the second half of 2002 and the important success of avoiding hyperinflation. Looking forward, the author�s analysis underscores the importance of strengthening fiscal performance, in part by increasing relatively low collections of value added taxes. He stresses the need for reform of the system of revenue sharing with the provinces; the importance of strengthening the banking system, which was severely weakened by asymmetric conversion of assets and liabilities from dollars to pesos; and the need to arrive at equitable restructuring of utility tariffs to reestablish confidence of foreign direct investors in the rules of the game. Restructuring government debt is also central to restoring growth. A simple model indicates that a relatively ambitious target for the primary fiscal surplus and a restricted set of senior-status debt will be needed to limit the haircut on junior debt to amounts compatible with longer-term creditor perceptions of fairness. The author also considers the new dynamics of bargaining with the International Monetary Fund (IMF). He judges that although conditionality is arguably appropriately less stringent as only rollover is involved, and despite the large outstanding debt to the IMF, there are limits to how lenient the Fund can and should be in key areas with potential for setting international precedents. 2014-04-25T14:48:52Z 2014-04-25T14:48:52Z 2003-10 http://documents.worldbank.org/curated/en/2003/10/2693690/restoring-economic-growth-argentina http://hdl.handle.net/10986/18043 English en_US Policy Research Working Paper;No. 3158 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean ARGENTINA |