ARGENTINA’S DEFAULT AND THE LACK OF DIRE CONSEQUENCES

BAER, WERNER; MARGOT, DIEGO; MONTES ROJAS, GABRIEL VICTORIO

ECONOMIA APLICADA

Universidade de São Paulo

Año: 2011 vol. 15 p. 131 - 146

1413-8050

We analyze the 2001 Argentine default on its foreign debt and its consequences in terms of the existing literature on sovereign debt default. It is our purpose to evaluate this experience and to see to what extent the Argentine case requires a re-thinking on the nature and consequences of defaults. We show that the Argentine case contradicts many of the standard predictions, in particular its posterior lack of access to international credit, restriction to international trade and negative economic growth. Moreover, it corroborates the historical fact that many defaulters “get away with it.”