1 / 15

Argentina in the Aftermath of International Financial Crisis: Commodity Booms and the New State Capitalism

Argentina in the Aftermath of International Financial Crisis: Commodity Booms and the New State Capitalism. Sylvia Maxfield Simmons College Prepared for a Workshop to Precede the Montreal International Studies Association Meeting, March 15, 2011. Generalizing Across the Region:

griselda
Download Presentation

Argentina in the Aftermath of International Financial Crisis: Commodity Booms and the New State Capitalism

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Argentina in the Aftermath of International Financial Crisis: Commodity Booms and the New State Capitalism Sylvia Maxfield Simmons College Prepared for a Workshop to Precede the Montreal International Studies Association Meeting, March 15, 2011

  2. Generalizing Across the Region: • commodity boom improves external and fiscal balance sheets • provides room for counter-cyclical policy • transmission mechanism of the crisis is trade not finance • You Can’t Have a Credit Crunch if there is No Credit • Argentina’s unique situation post-2001 crisis • Argentina’s New State Capitalism

  3. Regional growth over the century GDP per capita, LAC and Asia relative to US

  4. Commodity Prices Against 1970s Base • OcaOc Ocampo, Jose Antonio, 2009, Latin American and the global financial crisis, Cambridge Journal of Economics, 33.

  5. Argentine Growth 3rd Highest in Region, 2000-2008

  6. Commodity boom helped improve external balance sheet positions throughout the region and created space for counter-cyclical macro-economic policy

  7. Argentina’s macro-economic policy response • External and government balance sheets aided by pension fund nationalization in Fall 2008 • Central bank relaxes monetary targeting rules in 2010 (Fernandez fires Martin Redrado when he refuses to do this – confirmation of his successor required a public advertising campaign to win sufficient congressional support)

  8. Transmission mechanism of the crisis is through trade not finance • Data on correlation of export decline and GDP decline

  9. No banking crises in 2008-2009 • Banking crises in 1980-85 (Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay) • Banking crises 1995-2000 (Argentina, Brazil, Colombia, Ecuador, Honduras, Jamaica, Nicaragua, Paraguay, Peru) • Supervision & regulatory reform; flexible exchange rates (depreciation the norm); central bank independence and price stability

  10. Argentina: No credit to crunch • Data on credit

  11. Impact of crisis on unemployment much lower than in prior recessions Changes in unemployment rate (ILO) Prior recessions: Argentina=1998-2002; Brazil=2001-2002; Chile=1998-1999; Colombia=1998-1999; Mexico=1994-1995

  12. Argentina: the “bad” left or an example of the new state capitalism? • Kirschnerismo involves increased state ownership & social spending Central Government Expenditures (% of GDP)

  13. Room for countercyclical policy and state intervention is shrinking Fiscal and current account balances (% of GDP)

  14. Argentine fiscal situation in comparative perspective

  15. Growth prospects for remain strong Real GDP Growth 2009-2011 (OECD)

More Related