Argentinas Default and the Lack of Dire Consequences

We analyze the 2001 Argentine default on its foreign debt and its con-sequences in terms of the existing literature on sovereign debt default. It is our purpose to evaluate this experience and to see to what extent the Argentine case requires a re-thinking on the nature and consequences of defaults. We show that the Argentine case contradicts many of the standard predictions, in particular its posterior lack of access to inter-national credit, restriction to international trade and negative economic growth. Moreover, it corroborates the historical fact that many defaulters “get away with it.