Over the 1980s and 1990s, GDP growth had stagnated because of oil export price volatility and natural disasters, the sacrifice of capital formation to heavy external public debt service, and incomplete and uneven structural reform. The exchange rate depreciation that proved continually necessary...

Under the August 1988"Primavera"Plan and the July 1989"Bunge y Born"Plan stabilization programs, the Argentine authorities sought to anchor the price level through an appreciated real exchange rate, which they sustained through policies that maintained high domestic interest rates. The public...