Miami Herbert Hosts High-Level Discussion on Argentine Debt Crisis

Miami Herbert Hosts High-Level Discussion on Argentine Debt Crisis

By Manuel Santos and Alex Horenstein

Miami Herbert Hosts High-Level Discussion on Argentine Debt Crisis

By Manuel Santos and Alex Horenstein
Dr. Alejandro Werner, director of the Western Hemisphere Department at the International Monetary Fund (IMF), and Guillermo Nielsen, economist and main advisor to Argentina’s president-elect Alberto Fernandez, informally kicked off negotiations on Argentina’s $400 billion debt during a meeting held at Miami Herbert Business School.

A debt relief program is necessary for economic recovery and the protection of investors. In a recent paper, Miami Herbert Economics Professor Manuel Santos and Zhigang Feng, former Ph.D. student, lay out the economic framework for sovereign debt default.

While the IMF seeks a conventional debt haircut, the Argentinean government prefers a debt restructuring as to minimize negative reputational effects of partial default to global investors. Nielsen stressed that Argentina expects a fair deal from the IMF this time. In his view, the 2018 IMF loan of $57 billion to Argentina focused on supporting the former government of Mauricio Macri, rather than providing the desired stimulus to the ailing economy.

To watch a recording of the meetings held on Nov. 8, 2019, please see video below.