I processi cumulativi nella crisi del debito degli anni 80: una lettura dai casi di Argentina, Brasile e Messico Cumulative processes in the 1980s debt crisis: an analysis from Argentina, Brazil and Mexico's case studies

This paper analyses the 1980s Latin American debt crisis in Argentina, Brazil and Mexico and, in particular, the influence of cumulative processes at work in its early and final stages. The paper is organised in three sections. The first examines the crisis features in the three countries, and maps the key macroeconomic and behavioural relationships at its onset and resolution. The second reviews the IMF-WB standard macroeconomic adjustment model as formalised by Khan, Monthiel and Haque (1986), arguing that it cannot usefully be applied to a situation combining balance of payments and public finance disequilibria as experienced in the debt crisis. Therefore, an original three gap model is introduced that moreover considers the impact of cumulative processes. The econometric analysis provided in the third section allows to unravel the conundrum of causes, effects and responses to the crisis in each of the three countries, and to successfully test the hypotheses underlying the proposed model.