Abstract

HERRERA, Pablo Matías  and  GARCIA FRONTI, Javier. Response to a financial crisis in Argentina: How to deal with wealth inequality. Revista de coyuntura y perspectiva [online]. 2019, vol.4, n.2, pp.3-18. ISSN 2415-0622.

Abstract Ten years from the last financial crisis, and 17 years from the most virulent one in the history of Argentina, its government insists on policies that spark exchange rate volatility in attempting to right macroeconomic imbalances. The effects of this volatility on inequality should not be ignored as, for the most part, structural reform must be socially sustainable as well as economically sustainable. This work analyses some aspects of the response of the government to the 2018 financial crisis in Argentina. To do this, this work is organized in three sections. The first section gives a general overview of the current crisis and the response of the government and its distributive effects. The second section analyses a model and extends it for the case of an economy with two sectors, one of which has access to the world market, the effects of changes in the exchange rate on inequality are analysed and calibrated for Argentina focusing on the parameter τ. Finally, some policy recommendations are proposed.

Keywords : Financial crisis response; wealth inequality; tax structure.

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