Argentine Economy

Course Description
Once one of the richest and fastest growing economies in the world, Argentina
is now entrenched in the rankings of the less developed countries.
Nevertheless, in the last decade it has grown at a fast pace, one that was hard
to predict in the days of the 2001-2002 crisis. That a country that was viewed
as a pariah, effectively shut out of the international financial markets, could
recover from its worst crisis, is the topic of recent academic and political
discussions. The course will provide a truly comprehensive perspective that will
enable the students to analyze and understand the process experienced by the
Argentine economy from the late 19th Century until the present days, focusing
on the processes that led to the economic crisis at the turn of this century and
the measures implemented to overcome it. In the current world crisis scenario,
Argentina can thus serve as a case study of sorts.
Course Requirements
Class attendance is required of all students at UB. A 75% attendance to
classes is mandatory to keep the regular student status. An electronic system
keeps track of attendance. Students have to slide an electronic card every
class to comply with the attendance policy. Class participation is very
important; there will be several class discussions, which will rely heavily on
student participation. Students are expected to conduct research for the final
paper and consult the digital library (EBSCO) for that purpose. UB holds to
the view that plagiarism constitutes intellectual theft and is a serious breach
of acceptable conduct. Any student caught plagiarizing will immediately be
given a “no credit” for all courses taken in the semester. There will be no
make ups for classes falling on public holidays.
*For a better understanding of the comparable table for grading check online
http://www.ub.edu.ar/studies-abroad/palas.php
(PALAS 310) Argentine Economy 2
Grading Policy
Participation 10 %
Paper presentation (oral & written) 30 %
Midterm 25 %
Final Exam 35 %
Passing the final exam is mandatory in order to promote the course.
Required Textbooks and Materials
Luis Argüero, ed. Course Reader
Academic Calendar
Week 1
Monday March 6
Introduction. Presentation of the course. Objectives. Regions of Argentina.
History, autonomy and the federal system. Income and employment
disparities.
Wednesday March 8
Brief description of Argentine economic performance in the long run, trends,
cycles and current situation. Its socioeconomic performance compared to other
Latin American countries.
Week 2
Monday March 13
Brief explanation of development economics’ fundamentals. Capital
accumulation, growth and structural transformation.
Wednesday March 15
Economic growth vs. Economic development. The savings – investment
balance . Social capital. Institutions.
Week 3
Monday March 20
The economy before independence. The sources of growth of the Argentine
economy 1870-1914. Changes in Land, Labor & Capital accumulation.
Wednesday March 22
Agriculture in Argentina. Production and land ownership.
Week 4
Monday March 27
The early interwar period. The downturn in the terms of trade. Causes of the
decrease in the rate of capital accumulation.
Wednesday March 29
Argentina from 1930 to 1946.Changes in economic policy: import substitution
industrialization. Democracy, coup d’état and internal migration.
Week 5
Monday April 3
(PALAS 310) Argentine Economy 3
The new world’s economic scenario and its impact on Argentina. Neutrality and
trade surplus during WWII.
Wednesday April 5
Argentina from 1946 to 1955. The Peronist decade. Populism and government
intervention. Different approaches to economic policy: 1946-1952 , 1952-
1955. Shift from an outward orientation to an inward orientation. Success and
failure of the Peronist economic policy.
Week 6
Monday April 10
Political instability and economic failures. The armed forces and Marxism in
Latin America: The spread of the Cuban revolution. The School of the Americas
and involvement of the USA in Latin American politics.
Wednesday April 12
Argentina from Peron to the early 80’s. Lack of a sustained growth. Oil shocks
and debt crisis. Financial speculation, destruction of the local industry and
surge of poverty and unemployment. 80’s: political tensions. Peronismo
without Perón. Union strikes and de-industrialization. Hyperinflation. Economic
and social costs of the Argentine development strategies. LatAm cooperation:
the road to Mercosur.
Week 7
Monday April 17
Argentina in the 90’s. Menem's economic policy. The Convertibility Plan. Fiscal
policies. Privatization of public firms. The dependence of foreign capital flows.
The Washington Consensus.
Wednesday April 19
Economic performance 1992-1995 . The impact of the Mexican crisis. The
impact of the Brazilian devaluation. Economic performance and external
shocks. Evaluation of structural reforms. Employment behavior in the 90’s.
Review for the midterm exam.
Week 8
Monday April 24
Midterm exam
Wednesday April 26
Results of the exam
Week 9
Monday May 1 National holiday
Wednesday May 3
The path to Argentine crisis (1999 to 2001). The schedule for oral
presentations will be assigned.
New government and social unrest. The Vice President’s resignation. Migration.
Week 10
Monday May 8
(PALAS 310) Argentine Economy 4
Debt, tax increases and the IMF. Peso’s rigidity and lack of a “competitive
currency”. “Corralón” and “corralito”. Five presidents in ten days.
Wednesday May 10
Local currencies and bartering system. Destruction of the financial system.
Government finances. Central government-Provinces relationships. Debt
default and devaluation. Consultations about written paper.
Week 11
Monday May 15
Nominal and real salary reduction. Social unrest, subsidies and “Plan trabajar.
The Kirchner era (2003- ). The foundations of the Argentine recovery.
Agroindustrial exports as the key of Argentina turnaround. Brazil, emerging
markets and Foreign Direct Investment (FDI).
Wednesday May 17
Renegotiation of the external debt. What does a country own? Free Trade
Agreements in Argentina and South America. Relations with IMF, World Bank,
Interamerican Development Bank and the Paris Club.
Week 12
Monday May 22
Oral presentations (25’ each)
Wednesday May 24
Oral presentations (25’ each)
Week 13
Monday May 29
Change of government and continuity. The economic crisis of 2008 and its
impact on Argentina. The external and fiscal situation in Cristina Kirchner
government. Evolution of the twin surpluses.
Wednesday May 31
Argentinean economy in perspective: Production-exports-imports. From
untrustworthy to case study: miracle, “tailwind” or sound policy? Inflation. The
Argentine dilemma: capital flight vs. FDI. The “Dollar culture” and restrictions.
Week 14
Monday June 5
Vaca Muerta and Argentina’s shale oil and gas sector. Open discussion:
Argentine economy in the 21st Century: Opportunities, threats and projections.
Review for Final Exam
Wednesday June 7
Review for the final exam.
Week 15
"Students holding a tourist visa will not be allowed to take final exams, they
have to go to the 17 Floor to clear the hold"
Monday June 12
Final exam
Wednesday June 14
(PALAS 310) Argentine Economy 5
Final Grade Sheet and signature of “Hoja de situación” (attendance is
mandatory).
Bibliography
Argüero, L.I. “Argentina 2003-2015: A review of the Kirchner era”, UB.
Bethell , L. Argentina since independence, Cambridge University Press.
Cavallo, D.F. and Cottani, J. (2001), “Argentina’s convertibility plan and the IMF”, IMF
journal, Vol. 87, No.2, pp. 17-22.
Della Paolera, G. and Taylor, A. (2003), The new economic history of
Argentina, Cambridge University Press.
Della Paolera G. and Taylor A. (2000) “Economic recovery from the
Argentine Great Depression: Institutions , expectations and the change of
macroeconomic regime.” NBER Working paper 6767.
Frenkel, R. (2002), “Argentina: A decade of the convertibility regime”, Challenge, Vol.
45, No.4, pp.41-59.
Hornbeck, J.F. (2013), “Argentina’s Defaulted Sovereign Debt: Dealing with the
“Holdouts”, CRS R41029.
Kiguel, M. (2002) “Structural reforms in Argentina: Success or failure?”, Comparative
Economic Studies, Vol. 44, No. 2, pp.83-102.
Levitsky, S. and Murillo, M.V.. “Argentina: From Kirchner to Kirchner. Journal of
Democracy Vol. 19, No. 2, pp.16-30.
Lopez Murphy, R., Artana, D. and Navajas, F. (2003), “The Argentine economic
crisis”, Cato Journal, Vol. 23, No. 1, pp. 23-28.
Neto, A. y Vernengo M. (2002), “Globalization a dangerous obsession. Latin
America in the Post Washington Consensus era”, International Journal of
Political Economy, Vol. 32, No. 4, pp. 4-21.
O’Connell, A. (2005) “The recent crisis and recovery of the Argentine Economy: some
elements and background”, in Epstein, G. (ed.) Financialization and the World
Economy, Political Economy Research Institute.
Richardson, N. P. (2009), “Export-oriented populism: commodities and coalitions in
Argentina”, Studies in Comparative International Development 44 (3), pp. 228-
55.
Schuler, K. (2002), “Fixing Argentina”, Cato Institute Working Paper.
http://cdi.mecon.gov.ar/biblio/docelec/mu1901.pdf
Taylor , A. (1994) “Three phases of Argentine Economic growth”, National Bureau of
Economic Research, NBER Historical Paper #60.
Taylor A. (1999), “Latin America and Foreign Capital in the twentieth Century:
Economics, politics and Institutional change”, NBER Working Paper 7394.
Weisbrot, M. and Cibils, A. (2002), “Argentina’s crisis: The costs and consequences of
default to the international financial institutions”, Center for Economic and
Policy Research Research Brief, Nov. 19, 2002.
Wylde, C. (2011), “State, Society and markets in Argentina: The political economy of
neo-desarrollismo under Néstor Kirchner, 2003-2007”, Bulletin of Latin
American Research, Vol. 30, No. 4, pp. 436-452.