Chapter 9, Problem 18MESP

Summary Introduction

To discuss:

The Impact of Argentina’s economic crisis on saving and purchasing powers of the ordinary citizen.

Introduction:

Argentina was the star of the Latin America in the 1990s, but it defaulted on public debts in early 2002, it was the largest public default by any country ever. In order to stabilize the economy, the government seized and restricted the bank accounts and commercial transactions which resulted in a cash crisis and eventually took shape of big economic crisis.

Given information:

Argentina’s economy faced the highest crisis in 2001-2002 when the economy came down by 15%, unemployment raised up to 21%, approx 56% of citizen came down the poverty line, and the inflation rate was rising at a high speed.