Argentina Since Default: The IMF and the Depression

It is now more than eight months since the economic crisis led to demonstrations and riots that toppled the government of President Fernando de la Rúa in Argentina, and the country defaulted on its public debt. Argentina's economy has continued to decline, with the recession now having lasted more than four years. At this moment it is not yet clear when this downward spiral will end.

This paper looks at Argentina's crisis since the default in an attempt to find a way out of the depression. After more than half a year of negotiations, there has been no loan agreement with the IMF, nor is it clear when there may be one. Furthermore, it is not clear if a loan agreement will provide new resources—as opposed to simply providing money for multilateral debt payment. In addition, the costs to the Argentine economy of conditions attached to IMF loans may exceed the benefits. For these reasons, and others detailed below, it is important to consider the prospects for reviving the economy, whether or not an agreement with the IMF is reached....

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