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Debt

Argentina's Default, Cont'd

Dean Baker writes:

NPR's Planet Money made its entry in the Stake Your Claim game show with a segment on Friday that claimed that Argentina is suffering horribly as a result of its decision to default at the end of 2001. It turns out that Argentina has actually been doing quite well since its 2001 default as the most recent data from the IMF show.

Paul Krugman writes:

I feel Dean Baker's pain. Dean is exercised over an NPR report which says that Argentina is suffering from its 2001 default — a claim that is totally at odds with the evidence. Argentina actually did very well by thumbing its nose at creditors.

Megan McArdle writes:

I can't believe that Dean Baker and Paul Krugman listened to the same podcast that I did. In fact, I find it hard to believe that they listened to it at all.

Here's what we said in the podcast:

Robert Smith: It has been a tough decade for Argentina, but a lot of people think that the default was the best thing to happen to them.

Zoe Chace: After the money was devalued, banks opened up again. Pesos weren't worth as much, sure, but Argentinian products suddenly looked cheap on the world market. And that's been really good for Argentina's economy. Exports of staple products like soybeans and wheat went up. And eventually, some investors started to lend Argentina money again...

Robert Smith: This whole thing is something of a happy ending, after a long nightmare of a story.

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You can listen to the podcast here.