Honors Theses

Date of Award


Document Type

Undergraduate Thesis


Croft Institute for International Studies

First Advisor

Joshua Hendrickson

Relational Format



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.


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.

Included in

Economics Commons



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