GLOBALIZATION FINAL REPORT. Why is Argentina an example of globalization failure?
|
|
- Clyde Powell
- 5 years ago
- Views:
Transcription
1 GLOBALIZATION FINAL REPORT Why is Argentina an example of globalization failure? Raleigh Campus Globalization Seminar Group 12 Benoît PETIT - Clément PETIT - Rémi PETRELLA Pauline POIRIER - Vincent RACE 1
2 Introduction Argentina is one of the major countries in South America, along with Brazil, economically speaking. But even if today, the situation and the perspectives of Argentina are improving, they did not take a straight-ahead path. At the beginning of the 1990s, the government wanted to open up its borders in order to enjoy the globalization and be a wealthier country. Of course, before this date, Argentina was already part of a global world by exporting agricultural goods. It has taken some measures with side effects. Measures were not sustainable on the very long-term. The country had to undergo severe side effects and entered an economic recession between 2001 and Why is Argentina an example of globalization failure? We will begin by seeing further the characteristics of the Argentinian economy and know in depth the country. Then, we will pay attention to the policy that was implemented in the 1990s, and its side effects on the country s economy. We will finish by looking at what has been done within the last 10 years by the country s officials to recover a healthy situation. I) Why Argentina needed to enter a global market in the early 1990s a) Argentina before 1990 Argentina is very rich in natural resources and has a well-developed agricultural sector, it also seems that this country has the means to play a major role in economy and even become a leader, especially as an exporter of agricultural products. Sadly, the history of Argentina s economy is a tumultuous one: very high instability both economical and institutional. The origins of Argentina s economic crisis go back to the mid 1970s, when Argentina s military dictatorship acquired a huge debt in order to finance crazy projects. The 1980s were a period of economic turmoil and social problems. In 1981 and Argentina s GDP knew a negative growth of 12%, its worst decline since the great depression. Meanwhile, the median salary had fallen of 50% from its most recent high in The crisis turmoil was combined with a political instability, in 1982, Argentina tried in vain to invade the Falkland Islands, but eventually failed. This led to a shift from a military dictatorship to a democratic regime. When democracy was restored in 1983, unemployment was booming, wages were falling, and inflation was rising. Argentina simply didn t have the means or the power to recover, and in 1989, with a declining GDP, a big amount of debt and an inflation of 5,000%, the economy simply collapsed. By May 1989, conditions, both social and economic, had worsened to such a dramatic point that Argentinians took to the streets and rioted. At those days, foreign investors had long since fled, and it seemed the economic climate was far too risky for Argentina to achieve any kind of integration into the global economy. 2
3 b) Argentina s need for going global During the 1980s, the IMF pushed hard governments of poor countries to liberalize their capital markets. They were firmly thinking that capital controls were barriers to development. Irony of history, back in late 1980s, Argentina was well considered by the IMF. The IMF gave loans to Argentina in order to guide its policymakers in privatizing state enterprises, liberalizing foreign trade and investment, and improving government fiscal and monetary policy. During the 1990s, the country's economy improved a lot: the real income per capita was growing at a very fast pace of 4.5% per year. Argentina was part of a vast program of transformation that had been taking place in Latin America in the 1990s. Those countries abandoned economic strategies based on import and a very interventionist government. They adopted a more flexible model by doing reforms. This process brought opportunities based on natural resource and positive externalities of globalization. Controls on interest rates and prices were abolished. Major changes were introduced in tax policy and administration, the losses of central banks were reduced, public enterprises were restructured and privatized, public expenditures were cut and reoriented toward the development of human capital and infrastructure. II) What did Argentina s government in order to get globalized and what were the issues afterward? a) What has been made in Argentina to create a globalized economy? The power of trade unions had been very important in the election of Carlos Menem in 1989, who led the country for 10 years. Although, when he took power, he mostly implemented laws and reforms that went toward the financial sector way of thinking rather than labor. Menem made the labor laws more flexible in order to help the firms. Also, he chose to start privatizing companies and services providers held by government and depending on its funds. In 1991, He pegged the Argentinian Peso to the US Dollar: a Peso equals a US dollar. Any variation of the dollar would be reflected automatically on the Argentinian Peso. The government wanted to be perceived as a safe country by investors. So, if the currency was pegged to a strong worldwide currency, they thought the assets would be seen as worthy. It would also be easier to convert liquidities. The pegging of the peso would ease the privatization process, as investors would be much more likely to invest in national companies if they were sure that devaluation of the currency would not reduce their profits. Before the 1990s, most companies belonged to the country. From this date, the government engaged in a huge plan of privatizing most of its public services: airlines, electric power, post office, water utilities This was a way to attract new investors and bring new capital to push the growth up. Then, by selling companies to foreign investors, Foreign Direct Investments, the government got some cash back. This 3
4 cash was used to finance government investments that would be useful for Argentina s growth. The privatization gave Argentina s government cash. This was very helpful to lower the impact of the several economic issues that happened previously like the United States increasing interest rates and Mexican devaluation in But in reality, the sale of their businesses to private investors was just a way to fund the deficits caused by these economic shocks. However, in 1999 all the remaining companies that could be privatized in order to get fund have been privatized already. As a result, the state did not have any company left in case of a new crisis happening. b) What went wrong? Selling companies to private investors was a punctual entry of money, like exceptional revenue for a company. When all companies were sold, the country could not rely on this source of revenue any more to finance investments. Argentina had to find new means for raising cash. The privatization policies created an increasing disparity in incomes between the rich and the poor. Between 1991 and 1994, the pace of increase in income of the wealthiest 10% grew twice faster than the rate of the poorest 10% did. The incoming flows of money have benefited to a few part, which was already privileged rather than the entire country. Since the pegging of the Peso on the US Dollar in 1991, Argentina gave up the control of its money. Some country may act on their currency in order to tackle some issues, like inflation or disequilibrium of their BOP. But Argentina was not able to make any adjustments, because they didn t have the control on their money anymore. Argentina could no longer do that. This had been a problem, because Argentina and the USA have different characteristics. An action made by the USA for the American economy may not be a good thing for Argentina. Argentina also was weakened because its widely opened capital account: a large amount of debt in foreign currency made Argentina vulnerable to default not only if interest rates increased, but also if the currency depreciated dramatically, as it increases the repayment amount in domestic currency. Argentina's debt increased a lot in the 1990s. By 2000, the external debt/gdp ratio reached 51%, and the external debt/exports ratio was at 471%. Another drawback of the monetary policy led by Argentina was that Brazil was one of its privileged partners. Brazil was the first country in term of buying Argentinian goods. In the 1990s, Brazil knew several shocks and crisis, and the value of its currency, the Real, fell off a cliff. Thus, Argentina s products became very expansive for Brazil: as US Dollar remained strong, so did the Argentinian Peso. c) Aftermaths of the globalization policies In 1998, the collapse of the Brazilian currency led to important declines in export incomes. Economic growth was negative for three years in a row. In 2001, uncertainty about the growing public debt and the persistent economic downturn led 4
5 to very sharp increases in the yields of government bonds. Then the high amount of debt became unsustainable. Uncertainty extended to the viability of the currency peg, the investors and Argentinians didn t have faith in the ability of the financial system to repay dollar liabilities that were backed by peso assets, such as government debt. The result was a massive deposit withdrawal from the banking system. In December 2001, in order to stop it, Argentina suspended payments on its external debt and restricted deposit withdrawals. In January 2002, it abandoned its peg to the U.S. dollar. This resulted in a devaluation of around 40% of the Peso compared the US Dollar. Investments that had been made in peso did not worth something any more. Purchasing power of the population fell brutally. The impact of the Argentina crisis has been severe. In 2002, half of the population was living below the poverty line and the rate of inflation rose to 73%. III) The post globalization policy of Argentina a) A change in the economic policy As a result of the crisis, the economic policy that the government led since the starting of the globalization process changed drastically. The most urgent issue was the reduction of the debt, in order for the country to bounce positively. A number of measures have been taken in order to tackle that problem. One of the first decisions was to remove the currency board that was supposed to maintain a high value of the pesos. Other measures such as devaluation, government debt renegotiation have been implemented. Also the policy toward the rest of the world changed. The government decided for example to tax exports (that allows government to increase its revenue and it keeps domestic prices low) and to control capital inflows in order to avoid exchange rate appreciation. All of those measures had a real impact on the real economy. First, the debt increased to 125% of GDP in 2003, but then was reduced to 73% of GDP in Also, Unemployment rate fell from 23% in 2002, down to 10% in b) The positive effects and a quick recovery In 2002, Argentina has been obliged to stop devaluating, which could show positive aspects such as negotiating a debt reduction. Moreover, some concrete measures have been taken: freezing of price increases in public utilities, control on some financial capital inflows, freezing imposition on import taxes... With all these reforms, Argentina was at the beginning of a period of expansion: increase of GDP (as showed on the graph below) and low inflation rate. 5
6 This wonderful period has been painted in a black picture because of the behavior of the foreign sector and the government sector. The Argentine debt dynamics represents a dynamic growth and reaches a peak in 2004 until 125% of the GDP, reduced at 73% after the debt restructuring. When payments were delivered to organizations, Argentina showed a growing performance. By 2005, poverty has incredibly decreased from 55,7% to 33,8% in c) Is Argentina successful now? Today Argentina has recovered from the 2001 s crisis. The total GDP in 2010 was 756 billion dollar. Its growth was 9,2%, which is pretty good. Despite the nearly no growth in 2009 (due to the world crisis), the country seems to be fairly strong economically. The country is mainly exporting food as cereal and meat. Its primary economic partners are Brazil and the USA. From 2004 to 2011, the level of export compared to GDP stayed fairly steady at around 22%. This is still a low rate compared to other countries. In 2011, the unemployment rate is only 7%. It is a very good improvement compared to the 23% in Despite all those good economic good results, we have to take into consideration that Argentina is still suffering from two main issues. In one hand, the country is in very bad shape as far as corruption is concerned (ranked 100th out of 178th). In another hand, the inflation is still very high with nearly 25% every year. This rate is unsustainable and Argentina needs to address this issue as soon as possible. Also, the external debt is high and still growing. Those issues help to understand why Fitch, Moody s and S&P rate Argentina B. 6
7 Conclusion In the early 1990s, Argentina s government started new projects for the country in order to be fully open on the world, mainly to break with the previous dictatorship that was leading the country. Such a political regime had bad effects on many aspects within the country. To recover a good situation, the government decided to go global. In order to become attractive towards the world, the government privatized some companies and pegged the Peso to the US Dollar. But even if these measures had immediate positive consequences, they could not be used as a viable long-term solution. Actually, the government just gave up the control on the economy. So, 10 years later, in 1999, the country entered a recession for 3 years, with all other things that such a situation is leading to (social climate very low, default of payment from the country...). Then, to fix its problems, government had to walk back and implement new measures. First, they unpegged the peso from the US Dollar, implemented new taxes to get additional revenues, and renegotiated their debt... This bunch of measures made the situation easier to live in a few years time: less people are living under the poverty level, the debt has decreased to a more reasonable level regarding the GDP and so on. Today, even if the crisis froze the growth in 2009, the country is growing at the same pace as the emerging countries (BRICs) and presented a growth of 9,2% of its GDP in To reach such a figure, the Argentinian economy stressed on its historical strong point: agriculture and mostly cereals. If two decades ago, Liberalism was a goal, today, the government s policies are becoming more and more protectionist. 7
8 Bibliography Anonymous Student Interview (February, 6th, 2007), What Argentina Thinks about globalization: an interview from Buenos Aires Anonymous (March, 22nd, 2010), Globalization in Argentina: the collapse of the Argentinian Economy Camdessus, M. (May 27, 1996), Argentina and the Challenge of Globalization, Managing Director of IMF at the Academy of Economic Science Buenos Aires. Grugel, J., Pia Riggirozzi, M. (January, 18th, 2007), The return of the state in Argentina, International Affairs, I, 83, pp Hall, C., Matossian, P.D., Ghersa, C., Calvo, J., Olmedo, C. (March, 31st, 2001), «Is the Argentine National economy being destroyed by the department of economics of the university of Chicago?» Kerwin, T. (undated), Argentina s globalization experiment Krueger, A. (July, 17th, 2002), Crisis prevention and Resolution: Lessons from Argentina Pedersen, L. (June, 29th, 2012), «Argentina: Disconnecting from Globalism», Economic Perspectives Serven, L. Perry, G. (June, 12th, 2003), The anatomy of a multiple crisis: Why was Argentina special and what can we learn from it? Moreno, R. (October, 18 th, 2002), Learning from Argentina s Crisis, Federal Reserve Bank of San Francisco Macewan, A. (April 2002), Economic Debacle in Argentina, the IMF Strikes Again, Dollars and Sense magazine. 8
The fiscal adjustment after the crisis in Argentina
65 The fiscal adjustment after the 2001-02 crisis in Argentina 1 Mario Damill, Roberto Frenkel, and Martín Rapetti After the crisis of the convertibility regime, Argentina experienced a significant adjustment
More informationLessons from the stabilization process in Argentina,
By Hyperinflation exploded in 1989. It was the final stage of a chronic inflationary process that began in 1945 and lasted 45 years. From the beginning of the century until the end of World War II, Argentina
More informationAsian Financial Crisis. Jianing Li/Wei Ye/Jingyan Zhang 2018/11/29
Asian Financial Crisis Jianing Li/Wei Ye/Jingyan Zhang 2018/11/29 Causes--Current account deficit 1. Liberalization of capital markets. 2. Large capital inflow due to the interest rates fall in developed
More informationCHILE: GROWTH WITH STABILITY {')
INT-1337 CHILE: GROWTH WITH STABILITY {') ROBERTO ZAHLER Governor Central Bank of Chile January, 1995 (*) This paper is a slightly revised and updated version of the speech given by R. Zahler on November
More informationChapter 17 Appendix B
Speculative Attacks and Foreign Exchange Crises Chapter 17 Appendix B In the following two applications, we use our model of exchange rate determination to understand how speculative attacks in both advanced
More information4) The dark side of financial liberalization is. A) market allocations B) credit booms C) currency appreciation D) financial innovation
Chapter 9 Financial Crises 1) A major disruption in financial markets characterized by sharp declines in asset prices and firm failures is called a A) financial crisis B) fiscal imbalance C) free-rider
More informationRich and Poor. Indicators of Economic Welfare for 4 groups of countries, 2003 GNP per capita (1995 US$)
Rich and Poor Indicators of Economic Welfare for 4 groups of countries, 2003 GNP per capita (1995 US$) Life expectancy Low income 450 58 Lower-middle income 1480 69 Upper-middle income 5340 73 High income
More informationInternational financial crises
International Macroeconomics Master in International Economic Policy International financial crises Lectures 11-12 Nicolas Coeurdacier nicolas.coeurdacier@sciencespo.fr Lectures 11 and 12 International
More informationB.Sc. International Business and Politics International Economics Copenhagen Business School. Final Exam October 22, 2010
B.Sc. International Business and Politics International Economics Copenhagen Business School Final Exam October, 00 Note: Your grade depends not just on the right answer but on the quality of the explanation
More informationChapter 22 (11) Developing Countries: Growth, Crisis, and Reform
Chapter 22 (11) Developing Countries: Growth, Crisis, and Reform Preview Snapshots of rich and poor countries Characteristics of poor countries Borrowing and debt in poor and middle-income economies The
More informationExport Group Meeting on the Contribution and Effective Use of External Resources for Development, in Particular for Productive Capacity Building
Export Group Meeting on the Contribution and Effective Use of External Resources for Development, in Particular for Productive Capacity Building 22-24 February 21 Debt Sustainability and the Implications
More informationPrepared by Iordanis Petsas To Accompany. by Paul R. Krugman and Maurice Obstfeld
Chapter 22 Developing Countries: Growth, Crisis, and Reform Prepared by Iordanis Petsas To Accompany International Economics: Theory and Policy, Sixth Edition by Paul R. Krugman and Maurice Obstfeld Chapter
More informationKorean Economic Trend and Economic Partnership between Korea and China
March 16, 2012 Korean Economic Trend and Economic Partnership between Korea and China Byung-Jun Song President, KIET Good evening ladies and gentlemen. It is a great honor to be a part of this interesting
More informationEast Asia Crisis of Econ October 8, Team 5 Bryan Darch Svend Egholm Paramdeep Singh Sarah Zullo
East Asia Crisis of 1997 Econ 7920 October 8, 2008 Team 5 Bryan Darch Svend Egholm Paramdeep Singh Sarah Zullo The East Asian currency crisis of 1997 caused severe distress for the countries of East Asia
More informationArgentina: two devaluation episodes. Maria Muniagurria University of Wisconsin September 27, 2017
Argentina: two devaluation episodes Maria Muniagurria University of Wisconsin September 27, 2017 Two Episodes: Currency Board and 2001 Crisis (Sources: Sturzeneger talk at UW Madison 2002/ Feenstra Taylor,
More informationARGENTINA: WHAT WENT WRONG? Guillermo Perry and Luis Servén World Bank May 2003
ARGENTINA: WHAT WENT WRONG? Guillermo Perry and Luis Servén World Bank May 2003 Performance in the nineties: Better than most up to 1998, worse than most afterwards Real GDP Growth Rate (Percentages) 1981-90
More informationCrisis in Uruguay A snapshot of the country s international finance policies over the last decade
Crisis in Uruguay A snapshot of the country s international finance policies over the last decade Jeff Druchniak Julie Granof Matt Jacobs April 13, 2004 Public Policy 542 Executive Summary: Nearly a decade
More informationSuggested Solutions to Problem Set 6
Department of Economics University of California, Berkeley Spring 2006 Economics 182 Suggested Solutions to Problem Set 6 Problem 1: International diversification Because raspberries are nontradable, asset
More informationThe politics of Brazilian debt dynamics in the light of Argentina s default 1. By Domingo F. Cavallo
The politics of Brazilian debt dynamics in the light of Argentina s default 1 The political and economic decisions of Brazilian President Luis Inacio Lula da Silva in connection with the country s public
More informationOutlook for the Chilean Economy
Outlook for the Chilean Economy Jorge Marshall, Vice-President of the Board, Central Bank of Chile. Address to the Fifth Annual Latin American Banking Conference, Salomon Smith Barney, New York, March
More information3/9/2010. Topics PP542. Macroeconomic Goals (cont.) Macroeconomic Goals. Gold Standard. Macroeconomic Goals (cont.) International Monetary History
Topics PP542 International Monetary History Goals of macroeconomic policies Gold standard International monetary system during 98-939 Bretton Woods system: 944-973 Collapse of the Bretton Woods system
More informationMr Thiessen converses on the conduct of monetary policy in Canada under a floating exchange rate system
Mr Thiessen converses on the conduct of monetary policy in Canada under a floating exchange rate system Speech by Mr Gordon Thiessen, Governor of the Bank of Canada, to the Canadian Society of New York,
More informationHas US Debt Reached A Tipping Point?
Has US Debt Reached A Tipping Point? October 28, 2016 by Urban Carmel of The Fat Pitch Summary: Investors have become very concerned about excessive debt in the US. The worry is that current leverage has
More informationFinancial Crises. Benjamin Graham. Videos in this lecture are from Kahn Academy
Financial Crises Videos in this lecture are from Kahn Academy Today s Plan An updated syllabus is posted Today s topics: Kahn Academy Videos on foreign currency reserves and speculative attacks The Asian
More informationThe challenges of financial globalization Roberto Frenkel 1
The challenges of financial globalization Roberto Frenkel 1 Introduction to Session 1: Global Challenges, Restrictions and Policy Space: Finance and Development SPIDER WEB Inaugural Workshop (School for
More informationPublic Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Report No.
Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report No. PID7125 Project Name Argentina-Special Structural Adjustment... Loan (SSAL)
More informationDevelopment Policy Macro Management and Development Macro Stability and Growth: Case Study of Vietnam
Development Policy Macro Management and Development Macro Stability and Growth: Case Study of Vietnam James Riedel Outline: 1. How macro stability/instability is measured? 2. Inflation rate in Vietnam
More informationDeveloping Countries Chapter 22
Developing Countries Chapter 22 1. Growth 2. Borrowing and Debt 3. Money-financed deficits and crises 4. Other crises 5. Currency board 6. International financial architecture for the future 1 Growth 1.1
More informationECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY Annenberg Foundation & Educational Film Center
ECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY ECONOMICS U$A: 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY (MUSIC PLAYS) ANNOUNCER: FUNDING FOR THIS PROGRAM WAS PROVIDED BY ANNENBERG
More informationGlobal Financial Crises and the U.S. Economy: A Monetary Policymaker's Perspective
U.C. San Diego The Dean's Roundtable on International Affairs UCSD Faculty Club San Diego, California For delivery Wednesday, April 7, 1999, at approximately 8:40 a.m. PDT (10:40 a.m. EDT) by Robert T.
More informationFINANCIAL STABILITY IN THE REPUBLIC OF BELARUS
NATIONAL BANK OF 1 THE REPUBLIC OF BELARUS FINANCIAL STABILITY IN THE REPUBLIC OF BELARUS 2010 MINSK, 2011 2 This publication has been prepared by the Banking Supervision Directorate in concert with the
More informationTo understand where the U.S. Economy is going, we need to understand where we have been
To understand where the U.S. Economy is going, we need to understand where we have been From 2008:1-2009:2, the worst recession since Great Depression, with a slow recovery from 2009:3-2013:1. Historical
More informationThe Fundamentals of Exchange Rates
The Fundamentals of Exchange Rates POSC 1020 Introduction to International Relations Steven V. Miller Department of Political Science Puzzle(s) for Today I hear a lot about monetary relations and exchange
More informationNeoliberalism, Investment and Growth in Latin America
Neoliberalism, Investment and Growth in Latin America Jayati Ghosh and C.P. Chandrasekhar Despite the relatively poor growth record of the era of corporate globalisation, there are many who continue to
More informationGreece, November 2011, in light of Argentinean Experience exactly ten years ago.
1 Greece, November 2011, in light of Argentinean Experience exactly ten years ago. Keynote speech by Domingo Cavallo at the CEO Summit, Doing More on Less, Athens, November 22, 2011 Let me be very sincere
More informationPanel on. Policymaking in a Global Context. Remarks by. Robert T. Parry. President and Chief Executive Officer Federal Reserve Bank of San Francisco
Panel on Policymaking in a Global Context Remarks by Robert T. Parry President and Chief Executive Officer Federal Reserve Bank of San Francisco Delivered at the conference on Crises, Contagion, and Coordination:
More informationOther similar crisis: Euro, Emerging Markets
Session 15. Understanding Macroeconomic Crises. Mexican Crisis 1994-95 Other similar crisis: Euro, Emerging Markets Global Scenarios 2017-2021 The Mexican Peso Crisis in 1994: Background An economy that
More informationThese questions may help you prepare for the upcoming final test at 8:00 am on Wednesday, December 17.
PRACTICE QUESTIONS ON CHAPTER 20 ECO41 FALL 2014 UDAYAN ROY These questions may help you prepare for the upcoming final test at 8:00 am on Wednesday, December 17. CHAPTER 20 Optimum Currency Areas and
More informationAlmost everyone is familiar with the
Prosperity: Just How Good Has It Been for the Labor Market? Investing Public Funds in the 21st Century Seminar Co-sponsored by the Missouri State Treasurer, the Missouri Municipal League, GFOA of Missouri,
More informationRic Battellino: Recent financial developments
Ric Battellino: Recent financial developments Address by Mr Ric Battellino, Deputy Governor of the Reserve Bank of Australia, at the Annual Stockbrokers Conference, Sydney, 26 May 2011. * * * Introduction
More informationResilience in Emerging Market and Developing Economies: Will It Last?
International Monetary Fund World Economic Outlook October 212 Resilience in Emerging Market and Developing Economies: Will It Last? Abdul Abiad, John Bluedorn, Jaime Guajardo, and Petia Topalova with
More informationChallenges for Monetary Policy in Latin America and the Caribbean
Challenges for Monetary Policy in Latin America and the Caribbean XCVII Meeting of Central Bank Governors of the Center for Latin American Monetary Studies Brian Wynter Governor Bank of Jamaica 29 April
More informationMonetary and financial trends in the fourth quarter of 2014
Monetary and financial trends in the fourth quarter of 2014 Oil prices have significantly contracted in the third and fourth quarters of 2014, in an international economic environment marked by fragile
More informationStopping high Inflation: what the world learned from Latin America
Stopping high Inflation: what the world learned from Latin America ECON 3235 Economics of Latin America Lecture notes Fall 2017 September 25 th, 2017 Darryl McLeod, Fordham University Latin America has
More informationInternational Journal of Economics, Commerce and Management United Kingdom Vol. II, Issue 5,
International Journal of Economics, Commerce and Management United Kingdom Vol. II, Issue 5, 2014 http://ijecm.co.uk/ ISSN 2348 0386 Α FINANCIAL ANALYSIS OF PUBLIC FINANCES IN GREECE Markou, Angelos Technological
More informationThe Asian Crisis: Causes and Cures IMF Staff
June 1998, Volume 35, Number 2 The Asian Crisis: Causes and Cures IMF Staff The financial crisis that struck many Asian countries in late 1997 did so with an unexpected severity. What went wrong? How can
More informationCAPITAL FLOWS TO LATIN AMERICA: CHALLENGES AND POLICY RESPONSES. Javier Guzmán Calafell 1
CAPITAL FLOWS TO LATIN AMERICA: CHALLENGES AND POLICY RESPONSES Javier Guzmán Calafell 1 1. Introduction Capital flows to Latin America and other emerging market regions fell sharply after the collapse
More informationClosing Developing Countries Capital Drain
ECONOMICS JOSEPH E. STIGLITZ Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, is University Professor at Columbia University,
More informationLesson 3 - Measuring Economic Performance
Lesson 3 - Measuring Economic Performance Economic Activity: All of the actions that involve the production, distribution, and consumption of goods and services within a society. Economic Fluctuations:
More informationCanada s Economic Future: What Have We Learned from the 1990s?
Remarks by Gordon Thiessen Governor of the Bank of Canada to the Canadian Club of Toronto Toronto, Ontario 22 January 2001 Canada s Economic Future: What Have We Learned from the 1990s? It was to the Canadian
More informationREFORMING WORLD FINANCE. Lessons from a crisis
REFORMING WORLD FINANCE Lessons from a crisis The IMF has been attacked for its handling of the world s economic and financial troubles. Here its deputy managing director, Stanley Fischer, responds WHEN
More informationAlberto Romero: At the beginning of a new century: the current economic and financial situation in the Netherlands Antilles
Alberto Romero: At the beginning of a new century: the current economic and financial situation in the Netherlands Antilles Speech by Mr Alberto Romero, Executive Director Bank van de Nederlandse Antillen
More informationMADAGASCAR ECONOMIC UPDATE Economic crisis? Not yet but almost there. World Bank --May
MADAGASCAR ECONOMIC UPDATE Economic crisis? Not yet but almost there World Bank --May 19 2009 The Malagasy economy is headed toward a severe recession. In the absence of a clear resolution to the current
More informationThe Great Crash Ch 21-1
The Great Crash Ch 21-1 The Main Idea The stock market crash of 1929 revealed weaknesses in the American economy and trigger a spreading economic crisis. Learning Goal/Content Statement Content Statement
More informationcepr Briefing Paper Paying the Bills in Brazil: Does the IMF s Math Add Up? CENTER FOR ECONOMIC AND POLICY RESEARCH By Mark Weisbrot and Dean Baker 1
cepr CENTER FOR ECONOMIC AND POLICY RESEARCH Briefing Paper Paying the Bills in Brazil: Does the IMF s Math Add Up? By Mark Weisbrot and Dean Baker 1 September 25, 2002 CENTER FOR ECONOMIC AND POLICY RESEARCH
More information"Opportunities and Challenges of Demographic Change in Europe"
SPEECH/10/385 László Andor EU Commissioner Employment, Social Affairs and Inclusion "Opportunities and Challenges of Demographic Change in Europe" Economic Council Brussels Brussels, 13 July 2010 Ladies
More informationThe International Monetary System
INTERNATIONAL FINANCIAL MANAGEMENT Fourth Edition EUN / RESNICK The International Monetary System 2 Chapter Two INTERNATIONAL Chapter Objective: FINANCIAL MANAGEMENT This chapter serves to introduce the
More informationAlbert Edwards Dollar Appreciation and a Global Recession
Albert Edwards Dollar Appreciation and a Global Recession January 19, 2016 by Robert Huebscher As the equity markets have suffered their worst performance ever to start a year, we ve heard the familiar
More informationDOLLARIZATION FOR LATIN AMERICA? William A. Niskanen
William A. Niskanen My bottom line on the issue of Latin American dollarization is that (1) the U.S. government should not promote a general dollarization of Latin America, and (2) our government should
More informationThe Argentine Economy in the year 2006
The Argentine Economy in the year 2006 ECONOMIC REPORT Year 2006 1. The Current Recovery from a Historical Perspective The Argentine economy has completed another year of significant growth with an 8.5%
More informationChapter 19 (8) International Monetary Systems: An Historical Overview
Chapter 19 (8) International Monetary Systems: An Historical Overview Preview Goals of macroeconomic policies internal and external balance Gold standard era 1870 1914 International monetary system during
More informationBanking on Turkey, October 21, 2008
Banking on Turkey, October 21, 2008 Slide 1. Title Slide Good morning. The global economic downturn and financial turmoil mean that economic growth will slow down in Turkey. There will be much slower growth,
More informationChapter 8. Why Do Financial Crises Occur and Why Are They So Damaging to the Economy? Chapter Preview
Chapter 8 Why Do Financial Crises Occur and Why Are They So Damaging to the Economy? Chapter Preview Financial crises are major disruptions in financial markets characterized by sharp declines in asset
More informationThe coming battles over monetary policy
Jeff Frieden January 2013 The coming battles over monetary policy As the world recovers from the Great Recession, get ready for some new fireworks, of a sort we haven t seen for a while over monetary policy.
More informationBusiness Environment: Russia
Business Environment: Russia Euromonitor International 13 April 2010 Despite the economic recession of 2009, a recovery is expected in 2010. The business environment remains challenging due to over-regulation,
More informationLatin American Crises. Presentation 2 - EC/EIB 230 International Finance Mathew Cravens Venkatesh Ramamoorthy Jiong Zhou
Latin American Crises Presentation 2 - EC/EIB 230 International Finance Mathew Cravens Venkatesh Ramamoorthy Jiong Zhou Agenda Background of crisis - Economical & Political Transmission & Impact of crisis
More informationClosed vs. Open Economies
Closed vs. Open Economies! A closed economy does not interact with other economies in the world.! An open economy interacts freely with other economies around the world. 1 Percent of GDP The U.S. Economy
More informationGreece should restructure its debt but stay in the Euro
Greece should restructure its debt but stay in the Euro By Domingo Cavallo Sep 23, 2011 Greece should restructure its debt and reorganize its economy, but stay in the Euro and accept its monetary discipline.
More informationPolicy Brief. Does Turkey Need a New Standby Agreement? March 2008, No.9. Erdal T. KARAGÖL 1. Standby Agreements in Turkey
Policy Brief, No.9 Does Turkey Need a New Standby Agreement? Erdal T. KARAGÖL 1 Standby Agreements in Turkey Summary Since 1960, nineteen Standby arrangements have been signed. With these agreements, significant
More informationThe American Debt Burden
The American Debt Burden Can America Repay its Public Debt? Mohamed Rabie In June 1025, the US public debt exceeded $18.3 trillion, or 105% of the US Gross Domestic Product or GDP. In light of these facts,
More informationInternational Monetary Fund. Topic B: Colombia in Crisis. Chair: Ho Jin Sun. Moderator: Michael Rühl-Wolfe. Vice Chairs: Surbhi Mahamwal, Mike Wang
International Monetary Fund Topic B: Colombia in Crisis Chair: Ho Jin Sun Moderator: Michael Rühl-Wolfe Vice Chairs: Surbhi Mahamwal, Mike Wang April 10 13, 2014 Rühl-Wolfe 1 Colombia in Crisis Preface:
More information7/29/2017. Learning Objectives. The International Monetary and Financial Environment. Currencies and Exchange Rates
Learning Objectives The International Monetary and Financial Environment International Business: The New Realities, 4 th Edition by Cavusgil, Knight, and Riesenberger 9.1 Learn about exchange rates and
More informationThe Impact of the Brazilian Crisis in the Tenth District
The Impact of the Brazilian Crisis in the Tenth District By Ricardo C. Gazel and Chad R. Wilkerson The recent economic turmoil in Brazil, triggered by the devaluation in January of the real (Brazil s currency),
More informationL-1 Part 2 Introduction to Indonesia Case Study
L-1 Part 2 Introduction to Indonesia Case Study IMF Singapore Regional Training Institute OT 18.52 Macroeconomic Diagnostics February 26 March 2, 2018 Presenter Stephan Danninger This training material
More informationChapter 29 The Global Economy and Policy Principles of Economics in Context (Goodwin et al)
Chapter 29 The Global Economy and Policy Principles of Economics in Context (Goodwin et al) Chapter Overview This chapter will take you through the basics of international trade and finance. The chapter
More informationThe U.S. Economy and Monetary Policy. Esther L. George President and Chief Executive Officer Federal Reserve Bank of Kansas City
The U.S. Economy and Monetary Policy Esther L. George President and Chief Executive Officer Federal Reserve Bank of Kansas City Central Exchange Kansas City, Missouri January 10, 2013 The views expressed
More informationBC CAMPAIGN 2000 WHAT IS CHILD POVERTY? FACT SHEET #1 November 24, 2005
WHAT IS CHILD POVERTY? FACT SHEET #1 Poverty in Canada is measured by using Statistics Canada's Low Income Cut-Offs (LICOs). The cut-offs are based on the concept that people in poverty live in "straitened
More informationDr Andreas Dombret Member of the Executive Board of the Deutsche Bundesbank
Dr Andreas Dombret Member of the Executive Board of the Deutsche Bundesbank Looking to the future What comes next in terms of European financial integration? Speech at the South African Institute for International
More informationChina s macroeconomic imbalances: causes and consequences. John Knight and Wang Wei
China s macroeconomic imbalances: causes and consequences John Knight and Wang Wei 1. Introduction This paper is different from the specialist papers at this conference It is more general, and is more
More informationLatin American Economic Perspectives LASOS 2017 October 18, Hotel Intercontinental Buenos Aires, Argentina
Latin American Economic Perspectives LASOS 7 October 8, Hotel Intercontinental Buenos Aires, Argentina Gustavo Cañonero Partner & Director, Grupo SBS AGENDA I. Recent economic trends in LA II. The good,
More informationConsumer Debt and Money Report Q making business sense
Consumer Debt and Money Report Q3 2012 3 making business sense Executive summary & commentary The StepChange Debt Charity Consumer Debt and Money Report Q3 2012 expands on previous reports to build a nuanced
More informationCapital Flows and External Vulnerability Examining the Recent Trends in India
Capital Flows and External Vulnerability Examining the Recent Trends in India Prasenjit Bose After India s current account deficit (CAD) reached an all-time high of 4.2% of GDP in March 212, the Annual
More informationRutgers University Spring Econ 336 International Balance of Payments Professor Roberto Chang. Problem Set 1. Name:
Rutgers University Spring 2013 Econ 336 International Balance of Payments Professor Roberto Chang Problem Set 1 Name: 1. When the exchange value of the euro rises in terms of the U.S. dollar, U.S. residents
More informationKeeping the Economy on Track
San Francisco Rotary Club Marines Memorial Club For delivery December 5, 2000 at approx. 12:55 PM PST By Robert T. Parry, President, Federal Reserve Bank of San Francisco I. Good afternoon. Keeping the
More informationChapter 24 CRISES IN EMERGING MARKETS
Chapter 24 CRISES IN EMERGING MARKETS The previous chapter extended the IS-LM-BP model to accommodate high capital mobility. Chapter 24 applies that model to the crises that beset some middle-income countries
More informationEdexcel (A) Economics A-level
Edexcel (A) Economics A-level Theme 4: A Global Perspective 4.1 International Economics 4.1.7 Balance of payments Notes Components of the balance of payments The balance of payments is a record of all
More informationNotes 6: Examples in Action - The 1990 Recession, the 1974 Recession and the Expansion of the Late 1990s
Notes 6: Examples in Action - The 1990 Recession, the 1974 Recession and the Expansion of the Late 1990s Example 1: The 1990 Recession As we saw in class consumer confidence is a good predictor of household
More informationProspects for global macroeconomic development
vii Executive summary Prospects for global macroeconomic development As headwinds from the global financial crisis subside, policymakers have more scope to tackle longer-term issues that hold back sustainable
More informationTracking investments in quality standards across borders and sectors
Tracking investments in quality standards across borders and sectors Case Study: Examination of the trends and opportunities in ISO 17020 accreditation across Latin America 22 August 2018 Introduction
More informationSKBA CAPITAL MANAGEMENT, LLC
Investment Perspectives November 25, 2013 Should Corporate Dividends Matter to Investors? Part I Summary of Discussion By Andrew W. Bischel, CFA CEO & Chief Investment Officer Many studies of U.S. stock
More informationDiscussion of Boom, Bust, Recovery: Forensics of the Latvia Crisis By Olivier Blanchard, Mark Griffiths and Bertrand Gruss 1
Discussion of Boom, Bust, Recovery: Forensics of the Latvia Crisis By Olivier Blanchard, Mark Griffiths and Bertrand Gruss 1 By Kristin J. Forbes, MIT-Sloan School of Management November 11, 2013 This
More informationAre We There Yet? The U.S. Economy and Monetary Policy. Remarks by
Are We There Yet? The U.S. Economy and Monetary Policy Remarks by Esther L. George President and Chief Executive Officer Federal Reserve Bank of Kansas City January 15, 2019 Central Exchange Kansas City,
More informationTHOMAS WHITE INTERNATIONAL
THOMAS WHITE INTERNATIONAL Capturing Value Worldwide PORTFOLIO STRATEGY OCTOBER 2016 Emerging Markets: Renewing The Promise After nearly five years of underperformance, emerging market equities have regained
More informationBruce Greenwald: The Crisis Bigger than Global Warming
Bruce Greenwald: The Crisis Bigger than Global Warming April 26, 2016 by Robert Huebscher Manufacturing is dying on a global basis, according to Bruce Greenwald, and its collapse will mean the demise of
More informationGlobal Financial Crisis and China s Countermeasures
Global Financial Crisis and China s Countermeasures Qin Xiao The year 2008 will go down in history as a once-in-a-century financial tsunami. This year, as the crisis spreads globally, the impact has been
More informationVolume Author/Editor: Jeffrey D. Sachs and Susan M. Collins, editors. Volume URL:
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Developing Country Debt and Economic Performance, Volume 3: Country Studies - Indonesia,
More informationgrowth but still remains at approximately 1.5% of potential GDP.
THE UK ECONOMY IN FOCUS/APPLICATIONS Reminder of key objectives: Low and positive inflation (inflation rate target of 2%/- 1%) Sustainable growth of real GDP (no target) falling unemployment (no target)
More informationStrengths + and weaknesses
Chile: economic reality holds back reforms Country Report Ester Barendregt The Bachelet government is facing popular discontent on both the left and the right as well as a deteriorated economic environment,
More informationTHE GLOBAL ECONOMY AND POLICY Macroeconomics in Context (Goodwin, et al.)
Chapter 14 THE GLOBAL ECONOMY AND POLICY Macroeconomics in Context (Goodwin, et al.) Chapter Overview This chapter will take you through the basics of international trade and finance. The chapter introduces
More informationThe Problem of Widening Current Account Deficit of India
The Problem of Widening Current Account Deficit of India Article by Subho Mukherjee (2013) Source: http://www.economicsdiscussion.net/india/the-problem-of-widening-current-accountdeficit-of-india/10909
More information