THE CREATION OF THE ARGENTINE CENTRAL BANK AND ANTICYCLICAL POLICY DURING THE GREAT DEPRESSION

FLORENCIA SEMBER

Ginebra

Workshop; Latin America?s Economic Policies during the Great Depression; 2022

Université de Genève, Maison de l?Histoire

Argentina dealt withthe consequences of the Great Depression, first applying some emergencymeasures and then creating a Central Bank capable of implementing anticyclicalpolicies. In the first section, we will describe the first policies put inplace to deal with the effects of the depression. Argentina applied policies tocounteract the fluctuations in the balance of payments at the beginning of the1930s. However, the implementation was complicated because several differentinstitutions applied them. In the second section, we show that the situation triggered by difficulties in thebalance of payments, together with British pressure, led to the creation of thecentral bank in 1935. In the third section, we describe the anticyclical policiesput in place by the Central Bank of Argentina until the beginning of the 1940s.Finally, section four describes how the bank was limited by its statutes in themeasures it could take to sterilise the significant capital inflows from 1942. The fact that anticyclical was intended in thesense of mitigating the fluctuations in the balance of payments and not so muchin terms of stabilising the level of economic activity had several downsides. Inthe end, these limits led to the complete reformulation of the financial systemin 1946.