Has the Nature of Crises Changed? A Quarter Century of Currency Crises in Argentina

By Nada Choueiri, Graciela Laura Kaminsky

November 1, 1999

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Nada Choueiri, and Graciela Laura Kaminsky. Has the Nature of Crises Changed? A Quarter Century of Currency Crises in Argentina, (USA: International Monetary Fund, 1999) accessed November 12, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The recent turmoil in currency markets in Asia, Europe, and Latin America has given a new impetus to the literature on currency crises. The literature originally linked currency crises to deteriorating economic fundamentals, but has more recently focused on self-fulfilling expectations and contagion. To assess the changing roles of domestic and external market fundamentals and contagion, this paper examines seven major currency crises in Argentina. It finds that while crises in the 1970s and 1980s were driven mainly by monetary and fiscal policies at home and abroad, contagion played an important role in the 1990s.

Subject: Central banks, Demand for money, Exchange rate arrangements, Exchange rates, Foreign exchange, International reserves, Money, Multiple currency practices

Keywords: Adverse money demand demand shock, Argentina, Currency crises, Currency turmoil, Demand for money, Dual-market premium, Exchange rate, Exchange rate arrangements, Exchange rate market, Exchange rate regime, Exchange rates, Financial market, Global, Interest rate, Interest rate increase, International reserves, Mexican peso, Monetary policy shock, Money demand, Multiple currency practices, Reserves holding, Speculative attacks, Unit of account, Vector autoregressions, World interest rate, World interest rate shock, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/152
Stock No:

WPIEA1521999
ISBN:

9781451857078
ISSN:

1018-5941

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