... inflation to single digits within three years allowing the economy to grow. Throughout the boom years of the mid- 1990's, the federal government's fiscal position deteriorated as they ran deficits. Argentina's weak fiscal policy and mounting overvaluation creating relatively high inflation, a stronger dollar, insufficient domestic flexibility, and lack of sources of adjustment to maintain competitiveness lead to ... a second recession. The absence of fiscal policies and the fear that other policies were not strong enough to support the convertibility plan lead to ... the banking sector ...

• Word Count: 1837
• Approx Pages: 7
• Has Bibliography
• Grade Level: Undergraduate

... As a result, divergence between the economic cycle in the US and Argentina would have resulted in an inappropriate monetary policy affecting Argentina. As a result, the only tools for economic adjustment for Argentina to counteract these effects (whenever necessary) was fiscal policy. An additional problem of the central board was that the central bank can no longer be an unlimited lender of ... board and a positive global economic environment. ECONOMIC ARGUMENTS With the introduction of the currency board, Argentina sacrificed control of monetary policy, which meant that fiscal policy w...

• Word Count: 1586
• Approx Pages: 6
• Has Bibliography
• Grade Level: Undergraduate