Argentina: Anatomy of a Finance Crisis
Case number:
A03-04-0006
Abstract
This case is intended for a broad range of student/executive audiences and has the ability to be used successfully in a number of courses. It can be used in courses in international economics, international finance, international political economy, financial risk management, and regional courses focusing on the politics or economies of emerging markets/Latin America. Ideally, students/executives would have had macro and micro economics; however, I have found that students/executives with neither of these courses have still performed well in the case analysis. It is a challenging case study and is particularly useful in a MBA or executive MBA course, but can be taught successfully in advanced undergraduate courses.
Teaching
The purpose of the case study is to both illustrate the complex set of internal and external causes of emerging market financial crises and assist the student to comprehend the high degree and multiple strands of interdependence linking emerging market economies and the large international economy. The case is highly illustrative in the application of financial/banking concepts such as interest rate spreads, debt swaps, reserve requirements, the role of international sovereign credit rating agencies to the deteriorating position of Argentina's finances. Argentina's experience in December 2001/January 2002 and the failed policies that led up to this economic, political, and social tragedy, provide a vivid example of the risk associated with doing business in emerging markets in general and Latin America countries in particular with their penchant for excessive fiscal spending. More specifically this case helps the student to comprehend international economic and financial concepts and linkages, and assess financial and exchange rate risk.
Case number:
A03-04-0006
Subject:
Business
Government
International Policy
Year:
Setting:
Argentina
Length:
23 pages
Source:
Library