Finance and Development in an Emerging Market: Argentina in the Interwar Period
della Paolera, Gerardo | Taylor, Alan M.
The long-run economic performance of Argentina since World War One has been relatively disappointinguntil recently. Yet, in the interwar period, signs of future retardation and recurring crises were not soobvious. It is often claimed that an unmitigated success was the remarkably rapid growth of domesticfinancial markets. In conventional models, such "financial deepening" would help acceleratedevelopment, especially in an industrializing economy such as Argentina's. Yet the promise of this trendwas unfulfilled: first the outbreak of World War One and then the Great Depression proved a setback forthe fledgling financial system, and a long-run deterioration set in after 1940. In this paper we trace thecourse of financial development using historical and international comparisons and we analyze bothmacro- and microeconomic aspects of financial intermediation.Show more [+] Less [-]