AUTHOR'S BIO
Guillermo А. Calvo
Chief Economist, Inter-American Dev. Bank, Professor, University of Maryland; Director, Center for International Economics.
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Preying on Pensions?
Guillermo А. Calvo and Ernesto Talvi Series: Latin America 2003-03-31As Argentina's economy lost access to credit in late 2001, the government resorted to desperate measures in a vain attempt to avert disaster. Privatized pension funds--created in 1994 as a result of a Social Security reform based on individual accounts vested in bonds and equities--were one casualty. The government forcibly rescheduled the public debt holdings of these funds, known locally as AFJP. It also "pesofied" these holdings, which in mid-2001 amounted to more than 60% of the pension funds' portfolios, in effect converting dollar-denominated assets into local pesos overnight. ... read Comments: 0 Recommended: 0 Read: 13544
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What Went Wrong in Argentina?
Guillermo А. Calvo and Alejandro Izquierdo Series: Latin America 2002-03-13As Argentina's economy unravels in street demonstrations, food riots, and political tumult, conventional wisdom suggests that a lethal combination of reckless government spending and a fixed exchange rate is to blame. Large fiscal deficits, so this argument goes, pumped up domestic demand, which fueled inflation and caused the peso to appreciate in real terms, even though it was pegged to the US dollar at a nominal one-to-one exchange rate. As public debt grew, the government's only hope of paying it back was a deflationary clampdown on available money and credit--with a collapse in output, soaring unemployment, and civil disorder almost inevitable. ... read Comments: 0 Recommended: 0 Read: 16384
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The Real Hazard of Globalization
Guillermo А. Calvo Series: Frontiers of Growth 2002-02-22It is fashionable to blame the International Monetary Fund for the wave of financial turmoil that has swept emerging markets since Mexico's ``Tequila crisis'' of 1994. By bailing out countries in trouble time and again, the IMF allegedly encouraged investors to take unwarranted risks, plowing money into countries without properly assessing whether they could ever pay it back. According to IMF critics, bailouts allowed leaders from Brazil to Turkey to avoid painful but necessary reforms, with the perverse effect of making crises inevitable. ... read Comments: 0 Recommended: 0 Read: 15312
