International Monetary Fund’s intervention during crisis in emerging countries. Case study of Argentina

Abstract

We addressed the theme of the IMF’s intervention in Argentina because we found it challenging to discover how an emerging state with potential could have passed through all economic phases in just a few years. First, the empirical analysis proved that the continuous involvement of international organizations does not always have positive effects. This study aims to analyze the external debt, a cause of the economic collapse of 1998-2002, and what the authorities should have done to stop it. Second, in order to highlight the reasons why not only the right measures were taken, we applied an econometric model with four exogenous variables for 1987-2015. The external debt should have been restructured at the level of each creditor, but also with respect to the total amounts borrowed. At the same time, the private debt boom should have been stopped by stimulating competition during a crisis.