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Economic Recovery from the Argentine Great Depression: Institutions, Expectations, and the Change of Macroeconomic Regime

Published online by Cambridge University Press:  03 March 2009

Gerardo Della Paolera  and
Alan M. Taylor
Gerardo Della Paolera
Affiliation:
Rector and Professor of Economics at Universidad Torcuato Di Tella. Address: Miñ ones 2159/77, Capital Federal, Buenos Aires 1428, Argentina. Telephone: (+54)114-784-3386. Fax: (+54) 114-784-0089. Email: gerardo@utdt.edu.ar.
Alan M. Taylor
Affiliation:
Associate Professor at the University of California at Davis and a Faculty Research Fellow at the National Bureau of Economic Research. Address: Department of Economics, University of California, One Shields Avenue, Davis, CA 95616. Telephone: 530-752-1572. Fax: 530-752-9382. Email: amtaylor@ucdavis.edu.
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Abstract

Did macroconomic interventions make any contribution to Argentina's revovery from the Great Depression? Macroeconomic policy deviated from gold-standard orthodoxy after the final suspension of convertibility in 1929. Fiscal policy was conservative. Monetary policy became unorthodox after 1931, when the Caja de conversión began rediscounting to sterilize gold outflows and avoid deflation. This change predated the creation of the central bank in 1935. A wider literature links the interwar depression in the core to flaws in the gold standard, and active monetary policy to escape from defaltion and slump; our work extends this idea to the periphery.

Type
Articles
Information
The Journal of Economic History , Volume 59 , Issue 3 , September 1999 , pp. 567 - 599
Copyright
Copyright © The Economic History Association 1999

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