Subject. The article reveals the relationship between the increasing cost of servicing the current government debt and ensuring the debt sustainability of default economy, on the case of the Argentine Republic. Objectives. The study aims at conducting a comprehensive analysis of origins and mechanisms for resolving debt crises in the Argentine Republic. Methods. The study rests on methods of analysis, synthesis and extrapolation, using the database of the IMF, the Ministry of Economy, and the Central Bank of Argentina. Results. We discuss the approaches of the administration and the Central Bank of Argentina to the implementation of anti-crisis fiscal and monetary policy, reveal the details of Argentina's interaction with the IMF in providing assistance in the financial stabilization of the economy, show the economic consequences of excessive debt burden, present the data on the repayment of Argentina's public debt in the long run. The paper summarizes the distinctive features of the current debt of Argentina restructuring, including the increasing socio-economic and political risks. Conclusions. The distrust in debt securities and creditworthiness in the Argentine Republic increases the risk of serial default. The lack of the State's ability to provide financial support to the national corporate sector is reflected at the level of poverty, unemployment, and, as a result, it has an impact on the mood of the population, which threatens the intensity of riots that may spread outside the Argentine Republic.
Keywords: public debt, debt sustainability, budget deficit, default
References:
Cecchetti S.G., Mohanty M., Zampolli F. The future of public debt: Prospects and implications. BIS Working Papers, 2010, no. 300. URL: Link
Damill M., Frenkel R., Rapetti M. Lessons From the Argentine Case of Debt Accumulation, Crisis and Default. The United Nations Conference on Trade and Development, 2005, 52 p. URL: Link
Guzman M. An analysis of Argentina's 2001 Default resolution. Centre for International Governance Innovation, CIGI Papers, 2016, no. 110, 32 p. URL: Link
Cibils A., Vuolo R.L. At Debt's Door: What Can We Learn from Argentina's Recent Debt and Restructuring? Seattle Journal for Social Justice, 2007, vol. 5, iss. 2, pp. 754–795. URL: Link
Easterly W., Rebelo S. Fiscal policy and economic growth: An empirical investigation. Journal of Monetary Economics, 1993, vol. 3, iss. 32, pp. 417–458. URL: Link90025-B
Weisbrot M., Sandoval L. Argentina's Economic Recovery: Policy Choices and Implications. Center for Economic and Policy Research, 2007. URL: Link
Busso A. Neoliberal Crisis, Social Demands, and Foreign Policy in Kirchnerist Argentina. Contexto Internacional, 2016, vol. 38, no. 1. URL: Link
Guillén A.R. The effects of the global economic crisis in Latin America. Brazilian Journal of Political Economy, 2011, vol. 31, no. 2, pp. 187–202. URL: Link
Niemietz K.P. The Nationalisation of Retirement Savings Accounts in Argentina. Economic Affairs, 2009, vol. 29, iss. 1, pp. 49–53. URL: Link
Baer W., Margot D., Montes-Rojas G. Argentina's default and the lack of dire consequences. Economia Aplicada, 2011, vol. 15, no. 1, pp. 131–146. URL: Link
Alviggi С. The Argentine case: The U.S. District Court for the Southern District of New York interpretation of the pari passu clause and the recent U.S. Supreme Court opinion, Argentine vs NML Capital, ltd, no. 12-842 (i.e. the discovery case). URL: Link
Thomas C., Cachanosky N. Argentina's post-2001 economy and the 2014 default. The Quarterly Review of Economics and Finance, 2016, vol. 60, pp. 70–80. URL: Link
Sturzenegger F. Macri’s Macro: The Meandering Road to Stability and Growth. Brookings Papers on Economic Activity, BPEA Conference Drafts, 2019, pp. 1–58. URL: Link
Alvarez F., St. Aubyn M. Government Spending Efficiency in Latin America: A Frontier Approach. A Frontier Approach. CAF Development Bank Working Paper, 2014, no. 9, 42 p.
Greenidge K., Craigwell R., Thomas C., Drakes L. Threshold Effects of Sovereign Debt: Evidence from the Caribbean. IMF Working Paper, 2012, no. WP/12/157. URL: Link
Paret A.-C. Debt sustainability in emerging market countries: Some policy guidelines from a fan-chart approach. Economic Modelling, 2017, vol. 63, pp. 26–45. URL: Link
Herbert B., Schreger J. The Costs of Sovereign Default: Evidence from Argentina. American Economic Review, 2017, vol. 107, no. 10, pp. 3119–3145. URL: Link
Casalin F., Dia E., Hallett A.H. Public debt dynamics with tax revenue constraints. Economic Modelling, 2020, vol. 90, pp. 501–515. URL: Link
Guo M., McDermott J. Sovereign debt and the length of economic depressions. Economic Modelling, 2020, vol. 90, pp. 79–91. URL: Link
Astudillo M., Blancas B., Corona F.J.F. The Transparency of Subnational Debt as a Mechanism to Limit its Growth. Problemas del Desarrollo, 2017, vol. 48, no. 188, pp. 29–54. URL: Link
