Economic history of Argentina reforms such as open trade. On 1 January 1992, a monetary reform replaced the austral with the peso at a rate of 10,000 australs for 1 peso. The cornerstone of the reform process was a currency board, under which the peso was fixed by law at par to the dollar, and the money supply restricted to the level of hard-currency reserves. A risky policy which meant at a later stage Argentina could not devalue. After a lag, inflation was tamed. With risk of devaluation apparently removed, capital poured in from abroad. GDP growth increased significantly and total employment rose steadily
Currency Act the debt from King William’s War. Other colonies quickly followed suit, and by 1715 ten of the thirteen had resorted to the issuance of paper currency. Economist Stanley Finkelstein highlights the advantage of paper currency, “that unless it is backed by specie it is cost free currency.” The paper currency depreciated quickly because the colonies printed more than what was taxed out of circulation. By 1740, Rhode Island bills of exchange were only four percent of face value and those of Massachusetts were eleven percent. The money supply was growing at a much faster rate than that of the overall