@article{Johnson_2007, title={National exchange rate policies and international debt crises: how Brazil did not follow Argentina into a default in 2001-2002}, volume={27}, url={https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/554}, abstractNote={<p>This paper examines how exchange rate policies and IMF Stand-By Arrangements affect debt crises using econometrics and a comparison between Argentina and Brazil. It refines an existing diagram outlining crisis development to propose crisis prevention strategies. Flexible exchange rate policies reduce a country’s probability of default by over 4%, but Stand-By Arrangements increase it by an inconsequential percentage. Unlike Argentina, Brazil avoided a default via a freely-floating exchange rate system, fiscal deficit reduction, and a cooperative and coordinated relationship with the IMF. The results provide policymakers from developing countries with lessons to manage their countries’ default risks more effectively.</p> <p><strong>JEL Classification:</strong> B23, C12, C23, E44, E61, F34.</p>}, number={1}, journal={Brazilian Journal of Political Economy}, author={Johnson, Bryan Andrew Kenyon}, year={2007}, month={Jan.}, pages={60-81} }