with Menelaos Karanasos,
Karoglou and Panagiotis Koutroumpis
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.
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