Speculative and Entrepreneurial Behaviour: A Study of Micro-Economic Sustainability in Argentina During the 1990s

This paper sheds light on microeconomic sustainability after complete financial liberalisation was implemented in Argentina during the 1990s. Inspired by Keynes and Minsky, we estimate an investment model that accounts for financial constraints using panel data for Argentina during the 1990s. The main conclusion of the study is that there was an increase in speculative behaviour which was unconnected to entrepreneurial behaviour based on investment in fixed assets. Over the decade, the number of speculative firms increased. Moreover, these firms increased their debt burden, particularly with financial institutions. However, they did not use these funds to invest in fixed assets.