Executive Director Fundación Bunge y Born, Buenos Aires, Argentina, since 2016. Professor of Economics at Universidad Torcuato Di Tella. Member of the National Academy of Economic Sciences, Argentina. Education: Ph.D. in Economics, the Univesrity of Chicago 1988
Revista de economía política de Buenos Aires, 2018
This paper aims to test whether the average sovereign bond spread was statistically different fro... more This paper aims to test whether the average sovereign bond spread was statistically different from the average provincial spread in Argentina during 1997-2001, that is if investors perceived that Argentina's default risk being a federal country should have decoupled from provincial default risk or not. Second it estimates the (joint) determinants of Argentine sovereign bond spreads and sub sovereign provincial bond spreads over the period 1997-2001 in which Argentina was on a currency board. Third, the paper tests for the significance of provincial bond spreads in explaining sovereign default risk, by including the former in a time-series cointegrating equation where the dependent variable is the latter and examines the question of which is the true measure of country risk in a fuzzy fiscal federal nation like Argentina. Finally, it offers some insight into the relationship between default risk, public debt and fiscal federalism using Argentina as a case study.
We thank the IDB for support and Leticia Arroyo Abad for excellent research assistance. All error... more We thank the IDB for support and Leticia Arroyo Abad for excellent research assistance. All errors are ours. Alan Taylor served as a Senior Advisor at Morgan Stanley in 2010–11, and has received compensation for presenting research findings at private and public sector meetings. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at
We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their hel... more We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their helpful comments, and Carlos Bozzoli for his research assistance. Taylor gratefully acknowledges the support of the Chancellor’s Fellowship at the University of California, Davis. All errors are ours. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.
The purpose of this paper is to use the Argentinian experience with debt management during the la... more The purpose of this paper is to use the Argentinian experience with debt management during the last two decades to asses the usefulness of recent theoretical developments and to draw preliminary conclusions regarding policy implications.
We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their hel... more We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their helpful comments, and Carlos Bozzoli for his research assistance. Taylor gratefully acknowledges the support of the Chancellor’s Fellowship at the University of California, Davis. All errors are ours. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.
begun whilst Taylor and della Paolera were Visiting Fellows at the Hoover Institution. We gratefu... more begun whilst Taylor and della Paolera were Visiting Fellows at the Hoover Institution. We gratefully acknowledge financial support from the National Science Foundation, Hoover Institution, and the Centro de Investigation en Finanzas y Mercado de Capitales (CIF) at the Universidad Torcuato Di Tella. For their research assistance we thank Sandra Amuso, Marcela Harriague, and Silvana Reale. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.
The long-run economic performance of Argentina since World War One has been relatively disappoint... more The long-run economic performance of Argentina since World War One has been relatively disappointing until recently. Yet, in the interwar period, signs of future retardation and recurring crises were not so obvious. It is often claimed that an unmitigated success was the remarkably rapid growth of domestic financial markets. In conventional models, such "financial deepening" would help accelerate development, especially in an industrializing economy such as Argentina's. Yet the promise of this trend was unfulfilled: first the outbreak of World War One and then the Great Depression proved a setback for the fledgling financial system, and a long-run deterioration set in after 1940. In this paper we trace the course of financial development using historical and international comparisons and we analyze both macroand microeconomic aspects of financial intermediation. • Gerardo della Paolera is Rector and Professor of Economics at Universidad Torcuato Di Tella. Address: Miri...
In search of a more satisfactory approach to assess the performance of the Argentine economy over... more In search of a more satisfactory approach to assess the performance of the Argentine economy over the last century and a half, this chapter considers the outcomes of monetary and fiscal policymaking and the reaction of the public, as well as the constraints thereon. In particular, we place new emphasis on the socalled transversality condition – the long-run, intertemporal budget constraint of the government that places bounds on public finance policy choices. In the long run, macroeconomic policy choice can be viewed as a game between past, present, and future generations of political rulers and economic agents. Like any other player in this game,a current government takes decisions subject to a set of bestowed restrictions, and will, in turn, bestow new restrictions on the next generation of government. It is here that the intertemporal fiscal constraints matter. In this conception, policymaking is not a static game in which current payoffs are only affected by today’s decisions. A...
Revista de economía política de Buenos Aires, 2018
This paper aims to test whether the average sovereign bond spread was statistically different fro... more This paper aims to test whether the average sovereign bond spread was statistically different from the average provincial spread in Argentina during 1997-2001, that is if investors perceived that Argentina's default risk being a federal country should have decoupled from provincial default risk or not. Second it estimates the (joint) determinants of Argentine sovereign bond spreads and sub sovereign provincial bond spreads over the period 1997-2001 in which Argentina was on a currency board. Third, the paper tests for the significance of provincial bond spreads in explaining sovereign default risk, by including the former in a time-series cointegrating equation where the dependent variable is the latter and examines the question of which is the true measure of country risk in a fuzzy fiscal federal nation like Argentina. Finally, it offers some insight into the relationship between default risk, public debt and fiscal federalism using Argentina as a case study.
We thank the IDB for support and Leticia Arroyo Abad for excellent research assistance. All error... more We thank the IDB for support and Leticia Arroyo Abad for excellent research assistance. All errors are ours. Alan Taylor served as a Senior Advisor at Morgan Stanley in 2010–11, and has received compensation for presenting research findings at private and public sector meetings. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at
We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their hel... more We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their helpful comments, and Carlos Bozzoli for his research assistance. Taylor gratefully acknowledges the support of the Chancellor’s Fellowship at the University of California, Davis. All errors are ours. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.
The purpose of this paper is to use the Argentinian experience with debt management during the la... more The purpose of this paper is to use the Argentinian experience with debt management during the last two decades to asses the usefulness of recent theoretical developments and to draw preliminary conclusions regarding policy implications.
We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their hel... more We thank Andrés Velasco, an anonymous referee, and conference participants at LACEA for their helpful comments, and Carlos Bozzoli for his research assistance. Taylor gratefully acknowledges the support of the Chancellor’s Fellowship at the University of California, Davis. All errors are ours. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.
begun whilst Taylor and della Paolera were Visiting Fellows at the Hoover Institution. We gratefu... more begun whilst Taylor and della Paolera were Visiting Fellows at the Hoover Institution. We gratefully acknowledge financial support from the National Science Foundation, Hoover Institution, and the Centro de Investigation en Finanzas y Mercado de Capitales (CIF) at the Universidad Torcuato Di Tella. For their research assistance we thank Sandra Amuso, Marcela Harriague, and Silvana Reale. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.
The long-run economic performance of Argentina since World War One has been relatively disappoint... more The long-run economic performance of Argentina since World War One has been relatively disappointing until recently. Yet, in the interwar period, signs of future retardation and recurring crises were not so obvious. It is often claimed that an unmitigated success was the remarkably rapid growth of domestic financial markets. In conventional models, such "financial deepening" would help accelerate development, especially in an industrializing economy such as Argentina's. Yet the promise of this trend was unfulfilled: first the outbreak of World War One and then the Great Depression proved a setback for the fledgling financial system, and a long-run deterioration set in after 1940. In this paper we trace the course of financial development using historical and international comparisons and we analyze both macroand microeconomic aspects of financial intermediation. • Gerardo della Paolera is Rector and Professor of Economics at Universidad Torcuato Di Tella. Address: Miri...
In search of a more satisfactory approach to assess the performance of the Argentine economy over... more In search of a more satisfactory approach to assess the performance of the Argentine economy over the last century and a half, this chapter considers the outcomes of monetary and fiscal policymaking and the reaction of the public, as well as the constraints thereon. In particular, we place new emphasis on the socalled transversality condition – the long-run, intertemporal budget constraint of the government that places bounds on public finance policy choices. In the long run, macroeconomic policy choice can be viewed as a game between past, present, and future generations of political rulers and economic agents. Like any other player in this game,a current government takes decisions subject to a set of bestowed restrictions, and will, in turn, bestow new restrictions on the next generation of government. It is here that the intertemporal fiscal constraints matter. In this conception, policymaking is not a static game in which current payoffs are only affected by today’s decisions. A...
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