Carmen Reinhart:
"Argentina’s economy contracted 20 percent in 2001 after its default, as it was shut out of international markets for a time."And now, with Otto's permission, I will cue owly.
But why the owl you might ask? Well, it turns out, courtesy of Dean Baker's Beat the Press, that Reinhart's account of Argentina's foreign debt default might've been slightly off...Dean Baker:
"Actually, Argentina defaulted at the end of 2001. According to the IMF, it's economy then contracted 10.9 percent in 2002. It then turned around and grew at an average rate of almost 9.0 percent in the next five years. No one has such an optimistic set of projections for the Greek economy right now."Ouch! That's gotta hurt.
For those of you who don't know Carmen "prodigious data sets" Reinhart, she's an economist from the University of Maryland who's recently become quite famous for her work with Kenneth "obtuse math" Rogoff documenting financial crises. These two literally wrote the book on financial and sovereign debt crises--in their 2009 bestseller, This Time is Different: Eight Centuries of Financial Folly, Reinhart and Rogoff put together a data set dissecting crises as old as 800 years ago.
In any case, one of their findings is that throughout history sovereign debt crises usually follow banking crises. And it is no coincidence that Reinhart and Rogoff have been going around warning us that we should all be really, really worried about rising public debts now that the global financial crisis has ended.
Whatever. The point is that I find it surprising and disappointing for such a big name and no doubt an authority on the subject matter to get Argentina's story so wrong; especially since her academic work is usually of such high caliber (Reinhart has also made important contributions to the capital controls literature).
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