Rigidities in Openness, Export Perfomance and Indicators of External Solvency in Argentina

trade, Integration and Economic Development. The EU and Latin América

SpriengerWienNewYork

Año: 2008; p. 41 - 80

This paper emphasize the restriction posed by exports performance as determinant of the perceived capacity to fulfill external debt obligations. A long-run implication is that a degree of openness, determined by structural factors of an economy, sets admissible levels of external debt in foreign currency, and breaking this solvency condition causes CA reversals. Main empirical results for Argentina 1949-2004 are the following. The burden of the debt has a rising trend along the period. CA reversals are preceded in seven out of eight cases by a negative exports gap between required and expected exports. Argentina exhibits continuous solvency problems after the debt crisis of the early 1980s. Similar results are found when filtered exports series are used