Honors Theses
Date of Award
2014
Document Type
Undergraduate Thesis
Department
Croft Institute for International Studies
First Advisor
Joshua Hendrickson
Relational Format
Dissertation/Thesis
Abstract
At the beginning of October 2011, Argentina saw the emergence of a black market exchange rate for U.S. dollars. This black market exchange rate is known locally as the Dólar Blue. The importance of the Dólar Blue has become so public that it even has its own websites and social media accounts to inform its users of its daily rates as well as how and where to locate the human intermediary aspect of the black market known as the arbolitos. As a whole, black market exchange rates better reflect people's expectations about the true purchasing power of their currency and the corresponding rate of inflation. Black market exchange rates also provide people with a source of dollars that allow them to avoid inflation taxes levied on domestic currency. Evidence suggests that recent economic policy under the larger plan known as the cepo cambiario implemented by the administration of President Cristina Fernández de Kirchner is driving the black market exchange rate premium. By collecting daily exchange rate data for both the official and black market rates, this thesis tests the hypothesis that Fernández economic policy drove the black market exchange rate by calculating implied inflation levels. Then by following the methodology of Dornbusch et al. (1983), which supports the evidence that changes in the financial market cause fluctuations in the premium, this thesis analyzes the magnitude of the impact that five specific policies have on the Dólar Blue exchange rate. The results show that the magnitude of each of the five polices under the cepo cambiario have indeed had significant impact on the black market exchange rate, which implies that the Fernández government is in fact skewing officially reported inflation data.
Recommended Citation
Lanier, Brad Brunson, "The Dólar Blue: The Black Market Exchange Rate for Dollars in Argentina" (2014). Honors Theses. 131.
https://egrove.olemiss.edu/hon_thesis/131
Accessibility Status
Searchable text
Comments
A thesis presented in partial fulfillment of the requirements for completion of the Bachelor of Arts degree in International Studies from the Croft Institute for International Studies and the Sally McDonnell Barksdale Honors College.