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The economy of Argentina is an upper middle-income economy,[16] and Latin America's third-largest.[17]

The country benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Historically, however, Argentina's economic performance has been very uneven, in which high economic growth alternated with severe recessions, ACER Aspire 4743 CPU Fan

particularly during the late twentieth century, and income maldistribution and poverty increased. Early in the twentieth century it was one of the richest countries in the world and the third largest in the Southern hemisphere.[18] Though now an upper-middle income economy, Argentina maintains a relatively high quality of life and GDP per capita.[19] HP Pavilion dv6-2170us CPU Fan

Argentina is considered an emerging market by the FTSE Global Equity Index, and is one of the G-20 major economies.

Prior to the 1880s, Argentina was a relatively isolated backwater, dependent on the salted meat, wool, leather, and hide industries for both the greater part of its foreign exchange and the generation of domestic income and profits. Toshiba Satellite L675-S7018 CPU Fan

The Argentine economy, however, began to experience swift growth after 1875 through the export of livestock and grain commodities,[20] as well as through British and French investment, marking the beginning of a significant era of economic expansion.[21]

During its most vigorous period, from 1880 to 1905, this expansion resulted in a 7.5-fold growth in GDP, averaging about 8% annually.[22] ASUS F80Q CPU Fan

One important measure of development, GDP per capita, rose from 35% of the United States average to about 80% during that period.[22] Growth then slowed considerably, though throughout the period from 1890 to 1939, the country's per capita income was similar to that of France, Germany and Canada[23] (although income in Argentina remained considerably less evenly distributed).[20] ACER TravelMate 4200 CPU Fan

The great depression caused Argentine GDP to fall by a fourth between 1929 and 1936[24] Having recovered its lost ground by the late 1930s partly through import substitution, the economy continued to grow modestly during World War II (in sharp contrast to what had happened in the previous World War). Indeed, the reduced availability of imports and the war's beneficial effects on both the quantity and price of Argentine exports combined to create a US$ 1.7 billion cumulative surplus during those years.[25] HP 434678-001 CPU Fan

Benefiting from innovative self-financing and government loans alike, value added in manufacturing surpassed that of agriculture for the first time in 1943, and employed over 1 million by 1947.[26]

The administration of Juan Perón nationalized strategic industries and services from 1945 to 1955. Inflation first became a chronic problem during this period[24] HP G70-120EA CPU Fan

(it averaged 26% annually from 1944 to 1974) and Argentina did not become "industrialized" or fully "developed"; but, from 1932 to 1974, Argentina's economy grew almost fivefold (or 3.8% in annual terms),[27] while its population only doubled. This expansion was well-distributed and resulted in several noteworthy changes in Argentine society. For example, Toshiba Satellite A300-034 CPU Fan

it led to the development of the largest proportional middle class (40% of the population by the 1960s) in Latin America[27] as well as the region's highest-paid, most unionized working class.[28]

The partial enactment of developmentalism after 1958 was followed by a promising fifteen years. The economy, however, declined during the military dictatorship from 1976 to 1983, and for some time afterwards.[29] HP 606609-001 CPU Fan

The dictatorship's chief economist, José Alfredo Martínez de Hoz, advanced a disorganized, corrupt, monetarist policy of financial liberalization that increased the debt burden and interrupted industrial development and upward social mobility;[30] over 400,000 companies of all sizes went bankrupt by 1982,[24] and economic decisions made from 1983 through 2001 failed to reverse the situation. Compaq Presario CQ60-301sl CPU Fan

Record foreign debt interest payments, tax evasion and capital flight resulted in a balance of payments crisis that plagued Argentina with severe stagflation from 1975 to 1990. Attempting to remedy this, economist Domingo Cavallo pegged the peso to the U.S. dollar in 1991 and limited the growth in the money supply. TOSHIBA Satellite L300 CPU Fan

His team then embarked on a path of trade liberalization, deregulation, and privatization. Inflation dropped to single digits and GDP grew by one third in four years;[2] but external economic shocks and failures of the system diluted benefits, causing the economy to crumble slowly from 1995 until the collapse in 2001. ASUS Eee PC 701 CPU Fan

That year and the next, the economy suffered its sharpest decline since 1930; by 2002, Argentina had defaulted on its debt, its GDP had declined by nearly 20% in four years, unemployment reached 25%, and the peso had depreciated 70% after beingdevalued and floated.[2]

Expansionary policies and commodity exports triggered a rebound in GDP from 2003 onwards. Compaq Presario CQ60-305sa CPU Fan

This trend has been largely maintained, creating over five million jobs and encouraging domestic consumption and fixed investment. A number of important firms privatized during the 1990s were renationalized beginning in 2003. These include thePostal service, AySA (the water utility serving Buenos Aires), HP 637607-001 CPU Fan

Pension funds (transferred to ANSES), Aerolíneas Argentinas, and the energy firm YPF.[31]

The socio-economic situation has been steadily improving and the economy grew around 9% annually for five consecutive years between 2003 and 2007, and 7% in 2008. The global recession of 2007–10 affected the economy in 2009, with growth slowing to 0.8%.[2] HP Pavilion dv7-3067nr CPU Fan

High economic growth resumed, and GDP expanded by around 9% in both 2010 and 2011.[2] Foreign exchange controls, austerity measures, persistent inflation, and downturns in Brazil, Europe, and other important trade partners, contributed to slower growth (1.9%) during 2012.[4] Broad-based recoveries in the agricultural, construction, auto, and energy sectors created better prospects for 2013.[32] HP Pavilion dv5-1210ez CPU Fan

The Argentine government bond market is based on GDP-linked bonds, and investors, both foreign and domestic, netted record yields amid renewed growth.[33] Argentine debt restructuring offers in 2005 and 2010 resumed payments on the majority of its almost $100 billion in defaulted bonds from 2001.[34] Compaq Presario CQ50-211nr CPU Fan

Some holdouts, including small investors, hedge funds, and vulture funds, rejected the 2005 and 2010 offers to exchange their defaulted bonds, resorting instead to lawsuits and attempts to seize Argentine government assets abroad – notably Central Bank deposits in the Federal Reserve Bank of New York,[35] the presidential airplane, and the ARA Libertad.[36][37HP G56-114SA CPU Fan

]Bondholders who instead accepted the 2005 offer of 30 cents on the dollar, had by 2012 received returns of about 90 percent according to estimates by Morgan Stanley.[38] An August 2013 appeals court ruling determined that holdouts should be repaid the full face value,[39] but on unequal terms to the 93% who had accepted the earlier swaps at a discount.[40] SONY Vaio VGN-CR21Z/N CPU Fan

Courts in Belgium, France, and Germany have backed Argentina on the basis of the equal terms clause, however.The economic history of Argentina is one of the most studied, owing to the "Argentine paradox", its unique condition as a country which had achieved advanced development in the early 20th century but experienced a reversal, which inspired a wealth of literature and analyses on the causes of this decline.[1] HP Pavilion dv7-4060eo CPU Fan

Argentina possesses definite comparative advantages in agriculture, as the country is endowed with a vast amount of highly fertile land.[2] Before the arrival of Spanish explorers, present-day Argentina was populated by Indigenous peoples. Between 1860 and 1930, exploitation of the rich land of the pampas strongly pushed economic growth.[3] Toshiba Satellite M70-252 CPU Fan

During the first three decades of the 20th century, Argentina outgrew Canada and Australia in population, total income, and per capita income.[3] By 1913, Argentina was the world's 10th wealthiest nation per capita.[4]

Beginning in the 1930s, however, the Argentine economy deteriorated notably.[3] Toshiba Satellite A100-455 CPU Fan

The single most important factor in this decline has been political instability since 1930, when a military junta took power, ending seven decades of civilian constitutional government.[5] In macroeconomic terms, Argentina was one of the most stable and conservative countries until the Great Depression, after which it turned into one of the most unstable.[6] HP Pavilion dv5-2112br CPU Fan

Successive governments from the 1930s to the 1970s pursued a strategy of import substitution to achieve industrial self-sufficiency, but the government's encouragement of industrial growth diverted investment from agricultural production, which fell dramatically.[7]

The era of import substitution ended in 1976, but the same time growing government spending, DELL BFB0505HA CPU Fan

large wage increases and inefficient production created a chronic inflation that rose through the 1980s.[7] The measures enacted in 1976 also produced a huge foreign debt by the late 1980s, which became equivalent to three-fourths of the GNP.[7]

In the early 1990s the government reined in inflation by making the peso equal in value to the U.S. dollar, HP Pavilion dv6-3299en CPU Fan

andprivatised numerous state-run companies, using part of the proceeds to reduce the national debt.[7] However, a sustained recession at the turn of the 21st century culminated in a default, and the government again devalued the peso.[7] By 2005 the economy had recovered: there was considerable GNP growth, renewed foreign investment, and a significant drop in the unemployment rate. SONY Vaio VGN-NW11Z/T CPU Fan

During the colonial period, present-day Argentina offered fewer economic advantages compared to other parts of the Spanish Empire such as Mexico or Peru, which caused it to assume a peripheral position within the Spanish colonial economy.[8] It lacked deposits of gold or other precious metals,[9] nor did it have established native civilizations to subject to the encomiendaToshiba Satellite L550-20W CPU Fan

Only two-thirds of its present territory were occupied during the colonial period, as the remaining third consisted of thePatagonian Plateau, which remains sparsely populated to this day.[9] The agricultural and livestock sector's output was principally consumed by the producers themselves and by the small local market, and only became associated with foreign trade towards the end of the 18th century.[8] HP Pavilion dv7-4183sf CPU Fan

The period between the 16th and the end of the 18th century was characterized by the existence of self-sufficient regional economies separated by considerable distances, a lack of road, maritime or river communications, and the hazards and hardship of land transport.[10] By the end of the 18th century, a significant national economy came into being, HP Pavilion dv7-3190ev CPU Fan

as Argentina developed a market in which reciprocal flows of capital, labour, and goods could take place on a significant scale between its different regions, which it had hitherto lacked.[10]

Historians like Milcíades Peña consider this historical period of the Americas as pre-capitalist, as most production of the coastal cities was destined to overseas markets.[11] HP KSB06105HA CPU Fan

Rodolfo Puiggrós consider it instead a feudalist society, based on work relations such as the encomienda or the slavery.[11] Norberto Galasso and Enrique Rivera consider that it was neither capitalist nor feudalist, but an hybrid system result of the interaction of the Spanish civilization, on the transition from feudalism to capitalism, and the natives, still living in the prehistory.[11] HP G62-244CA CPU Fan

The Argentine territories, held back by their closed economies, the lack of any activity closely linked to foreign trade, and the scant amounts of labour and capital they consequently received, fell far behind those of other areas of the colonial world that participated in foreign trade.[12] Only activities associated with a dynamic exporting centre enjoyed some degree of prosperity,HP Pavilion dv7-3190ei CPU Fan

as occurred in Tucuman, where cloth was manufactured, and in Córdoba and the Litoral, where livestock was raised to supply the mines ofUpper Peru.[12]

This trade was legally limited to Spain: the Spanish Crown enforced a monopsony which limited supplies and enabled Spanish merchants to mark up prices and increase profits.[13] HP G62-244CA CPU Fan

British and Portuguese merchants broke this monopsony by resorting to contraband trade.[14]

The British desire to trade with South America grew during the Industrial Revolution and the loss of their 13 colonies in North America during the American Revolution. To achieve their economic objectives, ASUS A6000R CPU Fan

Britain initially launched the British invasions of the Río de la Plata to conquer key cities in Spanish America.[15] When they allied to Spain during the Napoleonic Wars, they requested the Spanish authorities to open commerce to Britain in return.

The first Argentine historians, such as Bartolomé Mitre, attributed the free trade to the The Representation of the Hacendados economic report by Mariano Moreno, HP Pavilion dv7-6011sg CPU Fan

but is currently considered the result of a general negotiation between Britain and Spain, as reflected in the Apodaca-Canning treaty of 1809.[17] The actions of Baltasar Hidalgo de Cisneros in Buenos Aires reflected similar outcomes emanating from the other Spanish cities of South America.[17] Toshiba Satellite L300D-01P CPU Fan

Compared to other parts of Latin America, slavery played a much lesser role in the development of the Argentine economy, mostly because of the absence of gold mines and sugar plantations, which would have demanded huge numbers of slave workers.[18] Colonial Brazil, for example, imported as many as 2.5 million Africans in the 18th century.[18] Compaq Presario CQ60-409CA CPU Fan

By contrast, an estimated 100,000 African slaves arrived at the port of Buenos Aires in the 17th and 18th centuries, and many were destined for Paraguay, Chile and Bolivia.[18]

The colonial livestock ranches were established toward the middle of the 18th century.[9] The pace of growth in the region increased dramatically with the establishment in 1776 of the new Viceroyalty of Rio de la Plata with Buenos Aires as its capital,HP Mini 110-3010sf CPU Fan

and increased legal trading allowed by the Free Trade Act of 1778,[19] which allowed for "free and protected" trade between Spain and its colonies.[20] This trade system disintegrated during the Napoleonic era, and contraband became common again.

During the early post-independence period, an important share of Argentina's exports came from cattle and sheep production.[21Toshiba Satellite L645D-S4056 CPU Fan

] The livestock-raising economy was based upon the abundance of fertile land in the littoral provinces.[21] Cropping apparently lacked comparative advantage compared to livestock grazing.[21]

Exports rose 4% to 5% annually from 1810 to 1850 and 7% to 8% from 1850 to 1870.[22] This growth was achieved through the extension of the frontier and greater efficiency in livestock production.[23] Toshiba Satellite M70-142 CPU Fan

As a result of the diversification in markets and products, Argentina managed to escape the trap of a single-staple economy and sustained its economic growth over six decades.[23] The combined effect of declining prices of textiles and rising prices of livestock products produced dramatic improvements in the terms of trade, which rose 377% between 1810 and 1825 in local prices.[21] DELL Inspiron E1505 CPU Fan

Several governors waged campaigns against the natives to increase the available lands, fromJuan Manuel de Rosas to Julio Argentino Roca.

Most poor gauchos joined forces with the most powerful caudillos in the vicinity. As the Federal party, they opposed the policies implemented by Buenos Aires, and waged the Argentine Civil Wars.[24HP 532613-001 CPU Fan

] The federalist Manuel Dorrego became governor after the resignation of Rivadavia and the end of the "happy experience", but he was executed by the unitarian Juan Lavalle during a military coup.

After Argentina became independent in 1810, an era in which commerce was controlled by a small group of peninsular merchants came to an end.[21] HP Envy 14-1080eo CPU Fan

The Primera Junta, the first government established after the 1810 May Revolution, undertook aprotectionist policy until their fall from government.

The First Triumvirate (1811–1812), influenced by Bernardino Rivadavia and Manuel García, instead promoted unrestricted trade with Britain.[25] ACER TravelMate 5230 CPU Fan

The Second Triumvirate (1812–1814) and José Gervasio Artigas (who controlled the Liga Federal during the 1815–1820 period) sought to restore the initial protectionist policy, but the Supreme Director restored free trade once more.[26] Thus, the economy of the Río de la Plata became one of the most open economies in the world.[21] Lenovo 3000 G430 CPU Fan

Between 1812 and 1816 divisions developed between an Unitarist faction centred on Buenos Aires and a Federalist faction in the provinces, which eventually led to a series of civil wars that ended with the conquest of Buenos Aires by Federalistcaudillos at the Battle of Cepeda in 1820.[27]

Each province had its own money, and the same money had a different value from one province and another, and even among cities in the same province.[28] ASUS EEE PC 1215N CPU Fan

The government of Martín Rodríguez (1820–1824) and his minister Bernardino Rivadavia, then Las Heras and finally Rivadavia himself as the first president of Argentina from 1826 to 1827, developed an economic plan deemed as "The happy experience". This plan increased the British influence in the national politics. It was based on five main pillars: Dell Vostro 3750 CPU Fan

complete free trade and no protectionist policies against British imports, finance with a central bank managed by British investors, absolute control of the port of Buenos Aires as the sole source of income from national customs, British exploitation of the national natural resources, and an Unitarist national organization centred in Buenos Aires.[29] Toshiba Satellite L500-018 CPU Fan

COMPAQ Presario CQ42-116TU CPU Fan

The exports of gold, allowed by the free trade policies, soon depleted the national reserves. This posed a great problem, as gold was the medium of exchange of the local economy. Rivadavia sought to fix it by establishing the "Discount Bank", acentral bank for printing fiat money. Despite of the role as a central bank, this bank was not owned by the state, but by private British investors. HP Pavilion dv6-2115eg CPU Fan

The report of the American John Murray Forbes to John Quincy Adams, sixth President of the United States, in 1824 mentioned that Britain had a huge influence in the economic power of the country.

He mentioned that the government in Buenos Aires was so eager to be on good terms with Britain and gain recognition of thedeclaration of independence that most official institutions (as the Bank) were under British control, Toshiba Satellite L645D-S4056 CPU Fan

and that Britain had similar control over the Argentine economy to that metropole of a colony, without the financial, civil or military costs.[30]Even the lack of an Argentine merchant fleet allowed Britain to manage the maritime trade.[31] Forbes's testimony should be appraised in perspective of the contemporary Anglo-American commercial rivalry, HP 646578-001 CPU Fan

In light of the partial nature of the account and of his "jealousy, even antipathy" towards the English in Rio de la Plata.[32]

In the mid-1820s, when Manuel José García was Minister of Finance, the government borrowed heavily to finance new projects and to pay off war debts.[33] SONY VAIO PCG-6L2L CPU Fan

These loans were tendered at usurious rates: in one notorious loan, the government received credit for £570,000 from the Baring Brothers in exchange for a debt of £1,000,000.[33] In the 1820s, the peso papel began to lose value rapidly with respect to the peso fuerte, which was linked to the price of gold.[34] Toshiba Satellite X205-S9349 CPU Fan

In 1827 the peso papel was devalued by 33%, and was devalued again by 68% in 1829.

Juan Manuel de Rosas forced Lavalle to leave the province, and the federals ruled Buenos Aires until 1852.[35] Rosas modified a number of policies of the Rivadavian period but maintained others: he set a customs law with protectionist policies, HP Pavilion dv7-3020es CPU Fan

but kept the port under the exclusive control of Buenos Aires and refused to call a constituent assembly.[36]

The customs law set trade barriers to products produced in the country, and imposed high import tariffs on luxury goods, together with export quotas and tariffs on gold and silver. However, HP G62-369TX CPU Fan

the law was not completely effective because of the control of the port, which did not allow the provinces a steady financial income.[37] The exclusive control of the port was long resisted by federals from other provinces, and led to the conflict of Rosas and Justo José de Urquiza at the battle of Caseros.[38HP 13.V1.BJ195.F.GN CPU Fan

] Despite the financial obstacles, the economy of Entre Ríos has grew to a size near that of Buenos Aires, with the decline of saladeros and the growth of wool production.

In 1838 there was a new currency crisis, and the peso papel was devalued by 34%, and in 1839 when the peso papel lost 66% of its value.[34] It was again devalued by 95% in 1845, and by 40% in 1851.[34Toshiba Satellite L675D-S7016 CPU Fan

] The Alsina years, which coincided with the secession of Buenos Aires, saw an extremely poor economic performance.[40] Efforts to fund extraordinary expenditure on the conflict between Buenos Aires and the other provinces of the Confederation caused the fiscal deficit to skyrocket.[40] Similarly, the Confederation faced harsh economic conditions. HP Pavilion dv7-1451nr CPU Fan

Urquiza, president of the Confederation, issued the 'law of differential rights', benefiting the ships trading with the ports of the Confederation and but not with Buenos Aires.[41]

The end of the civil wars provided the political and legal stability necessary to assert property rights and cut transaction costs, contributing to the huge inflows of capital and labour resources that built modern Argentina.[42HP G62-a57SG CPU Fan

] In 1866 an attempt was made to stabilize the currency, by introducing a system of convertibility,[43] which restricted the monetary authorities to issue paper currency only if it was fully backed by gold or convertible foreign currency.[34] The decades of the 1860s and 1880s experienced the most favourable performance of the economy overall, SONY Vaio VGN-NR31S/S CPU Fan

setting the stage for the so-called Golden Age of Argentine history.[44]

In the 60 years after the founding of the farming colony at Esperanza in 1856, the base of Argentine agriculture gradually shifted from livestock to crops.

Argentina, which had been insignificant during the first half of the 19th century, IBM 91P9252 CPU Fan

showed growth from the 1860s up until 1930 that was so impressive that it was expected to eventually become the United States of South America.[46]This impressive and sustained economic performance was driven by the export of agricultural goods.[47]

During the second half of the 19th century, there was an intense process of colonization of the territory in the form of latifundia.[2Toshiba Satellite M70-122 CPU Fan

] Until 1875 wheat was imported as it was not grown in sufficient quantities to supply local demand;[48] by 1903 the country supplied all its own needs and exported 75,270,503 imperial bushels (2,737,491.8 m3) of wheat, enough to sustain 16,000,000 people.[49]

In the 1870s real wages in Argentina were around 76% relative to Britain, rising to 96% in the first decade of the 20th century.[50] SONY UDQFWPH22FQU CPU Fan

GDP per capita rose from 35% of the United States average in 1880 to about 80% in 1905,[51] similar to that of France, Germany and Canada.

n 1870, during Sarmiento's presidency, total debt amounted to 48 million gold pesos. A year later, it had almost doubled.[44] HP Pavilion dv6-2150ei CPU Fan

Avellaneda became president after winning the 1874 presidential election.[53] The coalition that supported his candidature became the Partido Autonomista Nacional, Argentina's first national party;[53] all the presidents until 1916 would come from this party.[54] Avellaneda undertook the tough actions needed to get the debt under control.[44] HP G42-367TU CPU Fan

In 1876 convertibility was suspended.[44] The inflation rate rose to almost 20% in the following year, but the ratio of debt to GDP plummeted.[44] Avellaneda's administration was the first to deliver a balance in the fiscal accounts since the mid-1850s.[44]Avellaneda passed on to his successor, Julio Argentino Roca, a much more manageable economic environment. Toshiba Satellite P100-238 CPU Fan

In 1881, a currency reform introduced a bimetallic standard, which went into effect in July 1883.[55] Unlike many precious metal standards the system was very decentralized: no national monetary authority existed and all control over convertibility rested with the five banks of issue.[55] ACER Aspire 5739 CPU Fan

The period of convertibility lasted only 17 months: from December 1884 the banks of issue refused to exchange gold at par for notes.[55] The suspension of convertibility was soon accommodated by the government, since, having no institutional power over the monetary system, there was little they could do to prevent it.[55] IBM ThinkPad T40 2678 CPU Fan

The profitability of the agricultural sector attracted foreign capital for railways and industries.[47] British capital investments went from just over £20 million in 1880 to £157 million in 1890.[56] During the 1880s, investment began to show some diversification as capital began to flow from other countries such as France, IBM Thinkpad T43 CPU Fan

Germany and Belgium, though British investment still accounted for two thirds of total foreign capital.[56] In 1890 Argentina was the destination of choice for British investment in Latin America, a position it held until World War I.[56] By then, Argentina had absorbed between 40% and 50% of all British investment outside the United Kingdom.[56] IBM ThinkPad T43 2668 CPU Fan

Despite its dependence on the British market, Argentina managed a 6.7% annual rate of growth of exports between 1870 and 1890 as a result of successful geographic and commodity diversification.[57]

The first Argentine railway, a ten-kilometre road, had been built in 1854.[58] By 1885, a total of 2,700 miles (4,300 km) of railways were open for traffic.[58] IBM ThinkPad T43 1871 CPU Fan

The new railways brought livestock to Buenos Aires from the vast pampas, for slaughter and processing in the (mainly English) meat-packing plants, and then for shipment around the world.[59] Some contemporary analysts lamented the export bias of the network configuration, while opposing the "monopoly" of private British companies on nationalist grounds.[60] ACER Travelmate 8104WLMI CPU Fan

Others have since argued that the initial layout of the system was mostly shaped by domestic interests, and that it was not, in fact, strictly focussed on the port of Buenos Aires.

The scarcity of labour and abundance of land induced a high marginal product of labour.[2] European immigrants (chiefly Italians, Spaniards, French and Germans),[59] DELL Latitude E4300 CPU Fan

tempted by the high wages,[47] arrived in droves. The government subsidized European immigration for a short time in the late 1880s, but immigrants arrived in massive numbers even with no subsidy.

Juárez Celman's administration saw a substantial increase in the ratio of debt to GDP toward the end of his tenure and an increasing weakness in the fiscal situation.[40] ASUS F80S CPU Fan

TheBaring Brothers merchant bank had developed a close and profitable association with Argentina, and when Celman's government was unable to meet its payments to the House of Baring, a financial crisis ensued.[57] Argentina defaulted and suffered bank runs as the Baring Brothers faced failure.[62] HP Pavilion dv5-1058eo CPU Fan

The crisis was caused by the lack of co-ordination between monetary policy and fiscal policy, which ultimately led to the collapse of the banking system.[63] The financial crisis of 1890 left the government with no funds for its immigration subsidies programme, and it was abolished in 1891.[64] Loans to Argentina were severely curtailed, and imports had to be cut sharply.[57]IBM 13N5182 CPU Fan

Exports were less affected, but the value of Argentine exports did not surpass the 1889 peak until 1898.[57]

Celman's successor, Carlos Pellegrini, laid the foundations for a return to stability and growth after the restoration of convertibility in 1899.[65] He also reformed the banking sector in ways that were to restore stability in the medium term.[65IBM Thinkpad T30 2366-AA3 CPU Fan

]Rapid growth rates soon returned: in the period 1903–1913, GDP increased at an annual rate of 7.7%, and industry grew even faster, jumping by 9.6%.[66] By 1906, Argentina had cleared the last remnants of the 1890 default and a year later the country re-entered the international bond markets.[66]

All the same, between 1853 and the 1930s, fiscal instability was a transitory phenomenon.[44IBM Thinkpad T30 CPU Fan

] The depressions of 1873–77 and 1890–91 played a crucial role in fostering the rise of industry: timidly in the 1870s and more decisively in the 1890s, industry grew with each crisis in response to the need of a damaged economy to improve its trade balance through import-substitution.[67] By 1914, about 15% the Argentine labour force was involved in manufacturing, HP 535438-001 CPU Fan

compared to 20% involved in commercial activities.[68] In 1913, the country's income per head was on a par with that of France and Germany, and far ahead of Italy's or Spain's.[5] At the end of 1913, Argentina had a gold stock of £59 million, or 3.7% of the world's monetary gold, while representing 1.2% of the world's economic output. DELL Inspiron N3010 CPU Fan

Argentina, like many other countries, entered into a recession following the beginning of World War I as international flows of goods, capital and labour declined.[47] Foreign investment in Argentina came to a complete standstill from which it never fully recovered.[70] Great Britain had become heavily indebted to the United States during the war and would never again export capital at a comparable scale.[70] HP Pavilion dv6-3070tx CPU Fan

The United States, which came out of the war a political and financial superpower, showed no interest in Argentina, which it perceived as a potential rival on world markets.[70] Neither the Buenos Aires Stock Exchange nor the private domestic banks developed rapidly enough to fully replace British capital.[71] IBM 41W5269 CPU Fan

As a consequence, investable funds became increasingly concentrated in a single institution, the Banco de la Nacion Argentina(BNA), creating a financial system vulnerable to rent-seeking.[71] Rediscounting and non-performing loans grew steadily at the BNA after 1914, polluting its balance sheet.[72ASUS A8H CPU Fan

] This corrosion of balance sheets was a result of crony loans to the other banks and the private sector.[73] In its rediscounting actions the BNA was not engaged in pure lender of last resortactions, following Bagehot's principle of lending freely at a penalty rate.[73] Instead, the state bank allowed the private banks to shed their risks, SONY UDQFRZH13CF0 CPU Fan

with bad paper used as security, and lent them cash at 4.5%, below the rate the BNA offered its customers on time deposits.[73]

With the opening of the Panama canal in 1914, the importance of the Southern cone economies declined, as investors turned their attention to Asia.[74] The post-war recovery was short-lived and marked by scarcity of foreign investment.[70] HP COMPAQ 2510P CPU Fan

For all its success, by the 1920s Argentina was not an industrialised country by the standards of Britain, Germany or the United States.[75] A major hindrance to full industrialisation was the lack of energy sources such as coal or hydro power.[75] Experiments with oil, discovered in 1907, had poor results.[75] APPLE 661-4951 CPU Fan

Yacimientos Petrolíferos Fiscales, the first state-owned oil company in Latin America,[76] was founded in 1922 as a public company responsible for 51% of the oil production; the remaining 49% was in private hands.

The Great Depression had a comparatively mild effect on Argentina,[78] the unemployment rate never went above 10%,[79] and the country largely recovered by 1935.[78] However, the Depression permanently halted its economic expansion.[46] HP Pavilion dv6-3034ca CPU Fan

Argentina abandoned the gold standard in December 1929, earlier than most countries.[70]For much of the previous period, the country had operated a currency board, in which a body known as the caja de conversión was charged with maintaining the peso's value in gold.[80] The devaluation of the peso increased the competitiveness of its exports and protected domestic production.[47HP G56-126NR CPU Fan

] Argentina saw the value of its exports drop from $1,537 million in 1929 to $561 million in 1932, but this was by no means the most severe downturn in the region.[81]

In response to the Great Depression, successive governments pursued a strategy designed to transform Argentina into a country self-sufficient in industry as well as agriculture.[7] Compaq Presario C556CA CPU Fan

The strategy of growth was based on import substitution in which tariffs and quotas for final goods were raised.[47] The import-substitution process had progressively been adopted since the late 19th century, but the Great Depression intensified it.[67] The government's encouragement of industrial growth diverted investment from agriculture, and agricultural production fell dramatically.[7] SONY Vaio VGN-NR360E CPU Fan

In 1930 the armed forces forced the Radicals from power and improved economic conditions, but political turbulence intensified.[82] In 1932, Argentina required immigrants to have a labour contract prior to arrival, or proof of financial means of support.[83] The Roca-Runciman Treaty of 1933 gave Argentina a quota of the British market for exports of its primary products,HP Pavilion dv5170us CPU Fan

but the discriminatory British imperial tariffs and the effects of deflation in Britain actually led to a small decline of Argentine exports to Great Britain.[84]

Unemployment resulting from the Great Depression caused unrest.[82] The industrial growth spurt of the 1930s gradually slowed.[85] SONY Vaio VPC-EE3WFX/WI CPU Fan

The economic conditions of the 1930s contributed to the process of internal migration from the countryside and smaller towns to the cities, especially Buenos Aires, where there were greater opportunities for employment.[86] The urban working classes lead several unsuccessful uprisings prior to the 1937 presidential elections.[82] HP G56-126NR CPU Fan

Traditional export agriculture stagnated at the outbreak of World War II and remained sluggish.

After the 1943 Argentine coup d'état, Juan Perón, a member of the United Officers Group that engineered the plot,[87] became Minister of Labor.[82] Campaigning among workers with promises of land, higher wages, and social security, he won a decisive victory in the 1946 presidential elections.[82] HP 3MLX8TATP20 CPU Fan

Under Perón, the number of unionized workers expanded as he helped to establish the powerful General Confederation of Labor.[82] Perón turned Argentina into a corporatistcountry in which powerful organized interest groups negotiated for positions and resources.[82] During these years, Argentina developed the largest middle class on the South American continent.[88] SONY Vaio VGN-NW240F/S CPU Fan

Early Peronism was a period of macroeconomic shocks during which a strategy of import substitution industrialization was put into practice.[89] Bilateral trade, exchange controland multiple exchange rates were its most important characteristics.[89] The state's role in the economy increased, reflected in the increase in state-owned property, SONY Vaio VPC-EB1Z0E/B CPU Fan

interventionism(including control of rents and prices) and higher levels of public spending, mainly financed by the inflationary tax. The expansive macroeconomic policy, which aimed at the redistribution of wealth and the increase of spending to finance populist policies, led to inflation.[89] Compaq Presario CQ60-514NR CPU Fan

Perón used wartime reserves to pay off overseas debt, to nationalise foreign-owned enterprises, and established the IAPI to control the foreign trade in export commodities.[90] Perón erected a system of almost complete protection against imports, largely cutting off Argentina from the international market.[91] Toshiba Satellite X205-S9800 CPU Fan

In 1947, he announced his first Five-Year Plan based on growth of nationalized industries.[85] Protectionism also created a domestically oriented industry with high production costs, incapable of competing in international markets.[85] At the same time, output of beef and grain, the country's main export goods, stagnated.[91ASUS G2P CPU Fan

] The IAPI began shortchanging growers and, when world grain prices dropped in the late 1940s, it stifled agricultural production, exports and business sentiment, in general.[92]

During this period Argentina's economy continued to grow, on average, but more slowly than the world as a whole or than its neighbours, Brazil and Chile.[93] Compaq Presario CQ60-430SA CPU Fan

A suggested cause is that a multitude of frequently changed regulations, at times extended to ridiculous specifics (such as a 1947 decree setting prices and menus for restaurants), choked economic activity.[93] The long-term effect was to create pervasive disregard for the law, which Argentines came to view as a hindrance to earning a living rather than an aid to enforcing legitimate property rights.[93] DELL BFB0505HA CPU Fan

The combination of industrial protectionism, redistribution of income from the agrarian to the industrial sector, and growing state intervention in the economy sparked an inflationary process.[94] By 1950, Argentina's GDP per capita accounted just nearly half of the United States.[95] HP Pavilion dv5-1272et CPU Fan

Perón's second Five-Year Plan in 1952 favoured increased agricultural output over industrialization, but industrial growth and high wages in previous years had expanded the domestic demand for agrarian goods.[85] During the 1950s, output of beef and grain fell, and the economy suffered.[85] The policy shift toward agricultural production created a gap in income distribution,Toshiba AB7005HX-SB3 CPU Fan

as the majority of those who worked in agriculture laboured on tiny plots, while the majority of the land was in large estates.[88] Argentina signed trade agreements with Britain, the Soviet Union and Chile, slightly opening the market to international trade as Perón's second economic plan sought to capitalize on the country's comparative advantage in agriculture. Toshiba Satellite A500-18T CPU Fan

In the 1950s and part of the 1960s, the country had a slow rate of growth, while most of the rest of the world enjoyed a golden era.[46] With the exception of some years, stagnation prevailed during this period.In 1955 Peron was ousted in a coup known as Revolución Libertadora.Arturo Frondizi won the 1958 presidential election in a landslide.[97] HP Pavilion dv5-2135dx CPU Fan

In the same year he announced the beginning of the oil battle: a new attempt at import substitution which aimed to achieve self-sufficiency in oil production by signing several contract with foreign companies for the mining and exploitation of oil.[98] In 1960, Argentina joined the Latin American Free Trade Association.[91] ASUS EEE PC 1201NL CPU Fan

Wage growth in the early 1960s pushed prices up.[94] The inflation rate increased faster, and soon real wages fell.[94] High inflation prompted a stabilization plan that included tighter monetary policy, a cut in public expenditures, and increases in taxes and utility prices.[94]

Another coup in June 1966, the so-called Argentine Revolution, brought Juan Carlos Onganía to power. SONY Vaio VGN-NW240D/T CPU Fan

Ongania appointed Adalbert Krieger Vasena to head the Economy Ministry.[99] His strategy implied a very active role for the public sector in guiding the process of economic growth,[99] calling for state control over the money supply, wages and prices, and bank credit to the private sector. Compaq Presario CQ60-418DX CPU Fan

Krieger's tenure witnessed increased concentration and centralization of capital, coupled with privatisation of many important sectors of the economy.[99] The international financial community offered strong support for this program, and economic growth continued.[85] GDP expanded at an average annual rate of 5.2% between 1966 and 1970, compared to 3.2% during the 1950s.[101] SONY Vaio VGN-NW240D CPU Fan

After 1966, in a radical departure from past policies, the Ministry of Economy announced a programme to reduce rising inflation while promoting competition, efficiency, and foreign investment.[85] The anti-inflation programme focussed on controlling nominal wages and salaries.[102] Toshiba Satellite L645D-S4056 CPU Fan

Inflation decreased sharply, decreasing from an annual rate of about 30% in 1965–67 to 7.6% in 1969.[101] Unemployment remained low, but real wages fell.[101]

A gradual reversal in trade policy culminated in the military announcing import substitution as a failed experiment, lifting protectionist barriers and opening the economy to the world market.[91] Toshiba AB7805HX-GB3 CPU Fan

This new policy boosted some exports, but an overvalued currency meant certain imports were so cheap that local industry declined, and many exports were priced out of the market.[91] The Ministry of Economy put an end to the exchange rate policy of previous governments.[94] The currency underwent a 30% devaluation.[94] Toshiba Satellite L500-208 CPU Fan

In May 1969, discontent with Krieger's economic policies led to riots in the cities of Corrientes, Rosario and Córdoba.[103] Krieger was removed, but the Onganía administration was unable to agree on an alternative economic policy.[103] By 1970, the authorities were no longer capable of maintaining wage restraints, leading to a wage-price spiral.[100] HP 535441-001 CPU Fan

As the economy started to languish and import substitution industrialization ran out of steam, urban migration slowed.[88]Per capita income fell, and with it the standard of living.[88] Perón’s third term of office was characterized by an expansive monetary policy, which resulted in an uncontrolled rise in the level of inflation. Toshiba Satellite P100-444 CPU Fan

Between 1975 and 1990, real per capita income fell by more than 20%, wiping out almost three decades of economic development.[70] The manufacturing industry, which had experienced a period of uninterrupted growth until the mid-1970s, began a process of continuous decline.[104] The extreme dependence on state support of the many protected industries exacerbated the sharp fall of the industrial output.[105] HP Pavilion dv7-3114eo CPU Fan

The degree of industrialisation at the start of the 1990s was similar to its level in the 1940s.[104] In the early 1970s, per capita income in Argentina was twice as high as in Mexico and more than three times as high as in Chile and Brazil. By 1990, the difference in income between Argentina and the other Latin American countries was much smaller.[70] HP Mini 110-1125SA CPU Fan

Starting with the Rodrigazo in 1975, inflation accelerated sharply, reaching an average of more than 300% per year during the 1975–1991 period, increasing prices by a factor of 20 billion.[70]

When Martinez de Hoz assumed power as finance minister prices in the previous month had increased at an annual rate of 5,000% and output had declined sharply.[106] HP KSB06105HA CPU Fan

In 1976 the era of import substitution was ended, and the government lowered import barriers, liberalized restrictions on foreign borrowing, and supported the peso against foreign currencies.[7] This opening exposed the fact that domestic firms could not compete with foreign imports, Compaq Presario CQ60-210eo CPU Fan

in part because of the overvalued currency, but also because of long-term structural problems.[105] A financial reform was implemented that aimed to liberalize capital markets and link Argentina more effectively with the world capital market.[106]

After the relatively stable years 1976–78, fiscal deficits started to climb again and the external debt trebled in three years.[10www.all-laptopfan.com/hp-pavilion-dv7-2250sf-cpu-fan.html">HP Pavilion dv7-2250sf CPU Fan

7] The increased debt burden interrupted industrial development and upward social mobility.[108] Beginning in 1979 the rate of exchange depreciation was pre-fixed with a tablita, an activecrawling peg based on a timetable which announced ahead of time a gradually declining rate of depreciation.[ HP 434678-001 CPU Fan

These announcements were repeated on a rolling basis so as to create an environment where economic agents could discern a government commitment to deflation.[106] Inflation responded to this policy and gradually fell throughout 1980 to below 100%.[106] But gradually, during 1978 and 1979, the real exchange rate appreciated because inflation consistently outpaced the rate of depreciation.[106] HP G60-230us CPU Fan

The overvaluation ultimately led to capital flight and collapse of the financial system.

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