POLSCI 160 Chapter 9: FLS Chapter 9 (380-417)
17 Oct 2017
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In december of 2001, argentina rioters swept through the city angry that the government had frozen bank deposits so that citizens could only take small amounts of cash out of their banks. At the end of the day, fernando de la rua resigned and was evacuated by helicopter from the presidential palace. Argentine gdp had declined by 8% and dropped by 11% in 2002 and unemployment soared above 20% Shortly after this 12 european countries abandoned their currencies and adopted the euro. Give up the national currency in favor of another money. Tie the national currency value to that of another country. Continue to maintain a separate national currency whose value is allowed to change in response to markets and other forces. A national monetary systems is a classic public good: it benefits everyone, but because people cannot be excluded from its benefits and charged for them, there is little incentive for private firms to provide it.
