The Central Bank: an Indispensable Institution for Development

Abstract

The study of the agroexport economic model, the economic cycles and the international monetary system of the early 20th Century throws light on the need of creating an entity to manage monetary policy. The precarious nature of the preceding monetary mechanisms is exposed to unveil the key functions to be assumed by the new entity. On the basis of the peculiarities of the Argentine economy, the main challenges addressed by the different creation projects are raised, while those presented by Raúl Prebisch and Sir Otto Niemeyer are analyzed and compared. The study of both figures, with their views, concerns, priorities and proposals is developed without losing sight of the historical context and simultaneously interpreting their special nuances. The conclusion underlines the lessons left by the creation process of the Central Bank of the Argentine Republic (BCRA) in 1935 for future challenges.

JEL classification: N16 ; N26