Monetary and banking experiments in Argentina : 1861-1930

Abstract

During the 1861-1930 period, Argentina was under a virtual gold-exchange standard regime in the 1867-1876; 1883-1884 and, 1900-1913 years. In the remaining periods, a managed paper standard was in place, always with the aim to restore convertibility. I show that currency substitution was already an economic phenomenon in the Argentine economy. If currency substitution prevailed, then the notion that Argentina, by abandoning the Gold-Standard rule, could manage an independent monetary and banking policy to insulate the level of economic activity from shocks arising from the rest of the world should be qualified if not dismissed. In the medium run domestic attempts to inflate (or deflate) the economy were mainly reflected in changes in the foreign exchange rates and/or prices.