with Menelaos Karanasos and Michail Karoglou
July 2009
Argentina followed a unique trajectory: in 1900 it was a developed country
and in 2000 a developing one.
Although there is widespread consensus about the occurrence of this decline,
debate continues on its timing and
causes. The objective of this paper is to offer a comprehensive econometric
assessment of the timing of the
debacle with emphasis on the estimation of structural breaks. We employ
a battery of tests and multiple annual
GDP growth series covering the period from 1886 to 2003 to show that: (a)
there seem to be two main structural
breaks on Argentinean per capita GDP growth: one in 1918 and another in
1968, (b) for the ratio of Argentina’s
to U.S., Canada, New Zealand and Australia's per capita GDP , we detect
structural breaks in both 1930 and
1948, and (c) for the ratio vis-à-vis Western Europe, we detect
one major structural break in 1948. We argue
these results are consistent with recent research highlighting political
instability and financial development as
important causes of the Argentinean decline.
Maiden presentation at the Brunel Macroeconomics Research Centre conference,
1st July 2009.