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This paper explores policy failures that played a role in Argentina's economic collapse in December 2001. It notes that Argentina's primary spending as a share of GDP was about constant from 1994, when it was a "model" for the IMF, to 2001 when it faced bankruptcy. Argentina's crisis stemmed from a series of external shocks, beginning with the U.S. Federal Reserve Board's decision to raise interest rates in February 1994.

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