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Macro and micro-economic policies in financial crises : Argentina 2000 and South Korea 1998

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  • Macro and micro-economic policies in financial crises
  • Betz, Frederick
  • Sciedu


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Title Macro and micro-economic policies in financial crises
Similar Titles
Sub Title

Argentina 2000 and South Korea 1998

Material Type Articles
Author(English)

Betz, Frederick

Publisher

[Toronto]:Sciedu

Date 2013
Series Title; No Business and Management Research / Vol. 2(No. 4)
Subject Country Argentina(Americas)
South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Conditions
Economy < Economic Administration
Holding Sciedu

Abstract

Modern nations depend upon foreign investment to fund industrial developments in the nation and to fund government infrastructure developments. Governments use foreign investment to principally fund government services, when the tax base of the country has been insufficient to balance the government budget. But deficits can continue to grow, year after year. When the annual government budget deficit becomes a significant portion of the annual revenue of an economy (GNP), then foreign investors lose confidence in a government’s capability of continuing to finance its deficits. Investors stop buying government securities. The national currency exchange rate plunges. Local banks in a nation become insolvent. Bank runs occur as savers withdraw deposits from banks. Credit stops in a national economy, and businesses are unable to finance day-to-day production and pay wages. The economy plunges into a depression. Masses of people are unemployed. Property is lost. Families starve. Governments fall. (The rest omitted)