Yesterday, I visited La Casa Rosada, a large pink painted building that serves as the presidential mansion and executive offices. In 1873 this building started construction. Now I am in Buenos Aires 146 years later, and have been inspired by the tour of Casa Rosada to take a look at how decisions made inside this building and in the Argentine government affect Business.
Macroeconomic Policies
The Country of Argentina’s reputation for economic instability is not up for dispute in any means. Currently, there is an inflation rate of 25.7% and an unemployment rate of 8.7%. In addition, Project-Syndicate states that the country recently accepted a $57 billion stand-by loan. A stand-by loan is when a lender specifies an advanced amount that can be received by the borrower either when demanded or when certain criteria is met. The purpose is to ensure that there is more money available in case of a catastrophe or financial emergency (businessdictionary). Martin Guzman, author of the Project-Syndicate article writes that, “changing current macroeconomic policies would at least give the country a chance.”
It is also important to mention the economic crisis that began in 2001. Usually, a financial crisis is the result of the majority of the following conditions: little flexibility in the exchange rate, high current account deficit, high budget deficit, low foreign reserves, high political risk, and high contagion effect. All of these conditions were being met before the economic crisis.
A Business Students Diary 