From boom to burst: Argentine's primary sector, 1900s-1930s

MARTIREN, JUAN LUIS; DJENDEREDJIAN, JULIO

Boston

Congreso; XVIII World Economic History Congress; 2018

MIT - Massachusetts Institute of Technology

Between 1895 and 1914 Argentina experienced a huge economic growth, ranking among the wealthiest countries in the world by the outbreak of WWI. That process was promoted by a great boom in the agrarian sector, which boosted a fast industrial development and a construction fever. Nevertheless, from 1913 onwards, these ?best days? started to fall behind. This new conjuncture began with a cycle of stronger volatility in commodity prices before the outbreak of WWI, but became evident after the crash started in 1929. Economic literature has pointed out that the particular role and characteristics of the agrarian sector had a deep involvement in the fall of the Argentine economy, particularly taking into account that productivity limits for extensive growth had been reached in 1914, and no more expansion would be possible if not preceded by high capital investment. But for a country that has been traditionally a borrower, this was not an easy task in war and post war times. Rather than that, it seems that the question is why the Argentine economy's best performing sector, agriculture, has not been able to generate a higher investment rate. In this paper we will try to test that, by measuring factor productivity of the agrarian sector, and relating it to the performance of the whole economy, particularly manufacturing and construction sectors.