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Boom, Gloom, Doom: Balance Sheets, Monetary Fragmentation, and the Politics of Financial Crisis in Argentina and Russia

Author

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  • David M. Woodruff

    (Harvard University, Davis Center for Russian and Eurasian Studies, david.woodruff@post.harvard.edu)

Abstract

In the 1990s, Russia and Argentina both tied their currencies to the dollar to combat inflation. They later devalued under pressure, but only after an extremely costly delay, and only after an explosive spread of monetary surrogates substituting for official currency. This article explains these puzzling developments using an institutional-sociological approach to money, which relates exchange-rate preferences to financial context (“balance sheets†) rather than sectoral position, as is common. It proposes a “lock-in†mechanism explaining delayed devaluation in both cases, as well as Argentina’s greater delay, and explores the linkages between exchange-rate policy and the origins of monetary surrogates.

Suggested Citation

  • David M. Woodruff, 2005. "Boom, Gloom, Doom: Balance Sheets, Monetary Fragmentation, and the Politics of Financial Crisis in Argentina and Russia," Politics & Society, , vol. 33(1), pages 3-45, March.
    • Handle: RePEc:sae:polsoc:v:33:y:2005:i:1:p:3-45
    DOI: 10.1177/0032329204272550
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    Cited by:

    1. Walter, Stefanie, 2008. "A New Approach for Determining Exchange-Rate Level Preferences," International Organization, Cambridge University Press, vol. 62(3), pages 405-438, July.
    2. David M. Woodruff, 2014. "Governing by Panic: The Politics of the Eurozone Crisis," LEQS – LSE 'Europe in Question' Discussion Paper Series 81, European Institute, LSE.
    3. David M. Woodruff, 2014. "Governing by Panic: The Politics of the Eurozone Crisis," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 1, London School of Economics / European Institute.

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