The great depression as a global currency crisis: An Argentine perspective

Abstract

Many of the works that have tried to understand the proximate causes of the Great Depression have emphasized the consequences of maintaining the Gold Standard during the interwar period, as its innate inflexibility prevented the use of expansive monetary policies and generated recessionary deflationary processes. Another perspective, both complementary and different, is that offered by new works that consider the Great Depression as to some extent a consequence not so much of a Gold Standard per se, but of the return to redemability at an overvalued parity after the Great War. The novelty of this new approach is to stress the negative effect of maintaining an unbalanced price for the metal over time. The models that have analyzed the currency crises suffered in recent decades by many Latin American countries help to understand the path that led the world to the Great Depression, with the convertibility regime applied in Argentina between 1991 and 2001 being particularly relevant.