A Tale of Two Monetary Reforms: Argentinean Convertibility in Historical Perspective

Argentina adopted currency-type board arrangements to put an end to monetary instability in the nineteenth and the twentieth centuries under a very different historical circumstances and contexts with very different results. The first currency board functioned within an international system that worked in a manner similar to a closed economy. The poor export per-formance, the unsustainable trade and current account deficits, resulting from the process of external liberalization, and the process of internation-al financial liberalization eventually led to the collapse of the Convertibility experiment. The role of economic ideas – in particular, the incorrect lessons taken from the first globalization period – in furthering the economic imbalances were central to the failure of the 1991 Convertibility experiment