From "downpour of investments" to debt crisis: the case of Argentina 2015-2019

In December of 2015 Mauricio Macri took office as President of Argentina after 12 consecutive years of kirchnerismo. In a 180-degree policy shift, the Macri administration implemented a broad range of liberalization and deregulation policies. This resulted in a significant foreign exchange shortage and massive accumulation of external debt as the only compensating alternative in the chosen policy framework. Argentina’s insertion into the global finance and trade system as a dependent periphery nation, whose main sources of foreign exchange are primary exports or debt, imposes serious restrictions on its policy space. Not taking foreign exchange restrictions seriously and implementing the standard orthodox policy package results in crisis and economic paralysis as Macri’s four years in office patently show. In this chapter use a framework based on the insights from the currency hierarchy bibliography to analyse the theoretical restrictions of Argentina’s periphery status. We specifically examine the main policy changes implemented by the Macri administration, followed by an analysis of the empirical results of these policy changes in section. The chapter concludes that the resulting foreign exchange and debt crises which unfolded were the inevitable consequences of the polices implemented.