Economic history of Argentina assumed power, inflation was equivalent to an annual rate of 5000%, and output had declined sharply. In 1976, the era of import substitution was ended, and the government lowered import barriers, liberalized restrictions on foreign borrowing, and supported the peso against foreign currencies. That exposed the fact that domestic firms could not compete with foreign imports because of the overvalued currency and long-term structural problems. A financial reform was implemented that aimed both to liberalize capital markets and to link Argentina more effectively with the world capital market. After the relatively stable years of 1976 to 1978, fiscal deficits started
Economic history of Argentina import substitution, in contrast with the export-led growth favoured by Canada. Other distorting factors behind the high relative prices of capital goods include the multiple exchange rates, the black market for foreign currencies, the depreciation of the national currency and high customs tariffs. This resulted in a lower capital intensity, which led to lower rates of labour productivity. The ultimate cause of Argentina’s historical backwardness appears to be its institutional framework. In macroeconomic terms, Argentina was one of the most stable and conservative countries until the Great Depression, after which it turned into one of the most unstable. Economic history