Argentina: Monetary Policy by Default

George T. McCandless
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George T. McCandless: Central Bank of Argentina

A chapter in Monetary Policy and Macroeconomic Stabilization in Latin America, 2005, pp 87-112 from Springer

Abstract: Abstract After the Argentine banking and financial crisis at the beginning of 2002, the Central Bank was left with few tools to use to mitigate the effects of the crisis and initiate monetary policy. After providing a brief review of the crisis, I consider the set of traditional monetary policy channels and evaluate which channels were available to the Argentine authorities and how they were able to exploit them after the crisis. I find that only three of the traditional monetary policy channels were fully functional: the exchange rate channel, the expectations channel, and the money channel. An interest rate channel existed, especially with the introduction of the LEBACs, but its effectiveness was reduced by the severe problems in the banking system. The asset channel, the credit channel, and the household balance sheet channel were almost irrelevant.

Keywords: Exchange Rate; Interest Rate; Monetary Policy; Central Bank; Banking System (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-28201-3_5

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DOI: 10.1007/3-540-28201-7_5

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