Can Argentina’s Experience Help Predict the Effects of a Potential Grexit?

Abstract

In the debate about a possible exit of Greece from the euro area, Argentina is often referred to as an example – both by those in favour of and those warning of the adverse effects of a Grexit. Yet, while Argentina pulled off an impressive economic recovery after its 2001-02 crisis – one that goes beyond a mere commodity boom – there are important structural differences between the two countries, which still render a potential Grexit a very risky endeavour.