Monetary Policy in Argentina from the Inflation of the 1970s to the Default of the New Millennium

Abstract

Since the conclusion of World War II, Argentina has endured an uninterrupted cycle of financial, fiscal, and monetary crises that have systematically eroded the credibility of the nation's core economic institutions. This instability was particularly acute between 1970 and 1990, a period during which the Argentine economy suffered through seven distinct currency crises and three major banking collapses. This study primarily aims to investigate the underlying motivations and systemic reasons behind the specific economic policy choices that have defined the country’s trajectory since the military dictatorship of Colonel Perón. By examining these historical pivots, the research seeks to understand the mechanisms that repeatedly led the country toward sovereign default, subsequently triggering widespread unemployment, catastrophic runs on banks, and intense popular uprisings. Ultimately, this contribution provides a critical analysis of how decades of policy volatility have shaped the contemporary socio-economic landscape of Argentina, offering insights into the persistent challenges of institutional trust and fiscal stability.