Case Analysis: Argentina and the Limits to Macroeconomic Policy

Read the CASE ANALYSIS: Argentina and the Limits to Macroeconomic Policy on page 266

Write a 4-6 page paper (1000 or more words) in APA format in response to the questions:

1. Provide a brief overview of this case analysis; summarize the key points (no more than a page, ¾ of a page is better for this summary).

2. Research current economic data on Argentina. (You may find some information here
http://www.focus-economics.com/countries/argentina).
3. Explain why a currency devaluation, whether intentional or not, would be a problem.

4. The economic data of the current account to savings, investment, and the general government budget balance are calculated at the website listed under Item b. Discuss the pros and cons of current account deficits.

5. Does it appear that Argentina’s current economic crisis is caused by economic imbalances or caused by volatile capital flows?

6. Consider the question: Does this mean that developing countries cannot use expansionary macroeconomic policies? Provicixde an answer to this question.

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