CAMBRIDGE – Argentina’s latest default poses unsettling questions for policymakers. True, the country’s periodic debt crises are often the result of self-destructive macroeconomic policies. But, this time, the default has been triggered by a significant shift in the international sovereign-debt regime.
The government of Argentina has done it again. By flouting the rule of law and vilifying foreign investors, President Cristina Kirchner succeeded Wednesday in driving the country into its second default in 13 years. This isn't the global financial disaster predicted by some on the left, but it is sad news for the people of Argentina.