Social and economic behaviors. Therefore, it tends to

Social
economy entails existing relationships between both social and economic
behaviors. Therefore, it tends to analyze ways in which social morals, ethics
and particular humanitarian philosophies influence consumer behaviors.  In fact, it is crucial when it comes to
examining specific activities that have a relation with economics amongst one
specific business and thus exposing the information to the general community
about volunteer sectors and also social enterprises (Schneider, Kallis & Martinez-Alier, 2010).  Development of social economy results from
the need of having new solutions that would effectively solve particular issues
in the city and also to ensure satisfaction of the requirements that have been
ignored in one way or another by not only public sector but also private once.

Social
Economy and Human Relationships

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With
the collapse of the economy of Argentina in 2001, the state finds itself in a
condition where factories have been abandoned which in turn increased in
unemployment individuals.  While
considering years in the 1990s, Argentina outperformed most of the countries in
Latin America regarding growth and economic development. However, with the
pegging of its hard currency to US Dollar, high foreign debt and also
pro-cyclical fiscal policies, Argentina was left helpless regarding dealing
with some different economic shocks. It resulted in an outbreak of severe
currency, dept, sovereign and most commonly known banking crisis.

Eventually,
there was a significant impact on both economic and also social impact. With
the negativity of the commercial growth form 1998, the economy can be related
to a contract of eleven percent by the year 2002. Decreases in the gross
domestic product rate will effectively result in a rise in the unemployment
rate. It would significantly contribute to an increase in the number of
individuals living below the national poverty level, in this case, Argentina.
But when looking further, the collapse of the economy, in this case, did not
only results in an increase in unemployment individuals but also affected other
government-related activities and increase in riot cases. Generally speaking,
there was a decline of twenty-eight percent in the economy of Argentina from
1998-2002.

The
International Monetary Fund (IMF) is responsible for the provision of financial
support. But if in any case, a particular country fails to meet the
requirements and conditions between them, the organization may be forced to cut
off any existing support. A similar situation happened to Argentina after its
failure to meet their conditions that were to rescue the program from the year
2001 on September.  The problem, in this
case, is not only to the government but also to the societies. For the instance
of Argentina, there was an increase in social unrest due to the IMF cut off. It
meant that Argentina had lost its last sources that they were able to access
financial help and for foreign capital. Like most social unrest, lives can be
lost, and injuries occur which is also another social-related problem. In fact,
the problem was even more severe that it led to the resignation of the
president and the mister of an economy after those events.

Fiscal
Mismanagement

Fiscal
policies play an essential role in contributing to the economy of any country.
By this, it means that for those countries that have an exchange rate regime
that is fixed, there is a need to follow a counter-cyclical fiscal policy. But
when considering Argentina, its monetary policy was Pro-cyclical during that
time. By then persistent, De La Rua, aimed at tackling the resultant budget
deficit that was of 2.5% of the total gross domestic product and also ensures
that he fought against corruption that was enduring in the country. The aim of
reducing the deficit is mainly to restore confidence regarding government
finances, lower interest rate thus ensuring they significantly bring back their
economic growth (Sandleris & Wright, 2014).
But the effects of this president were however opposite as increase in their
imposed taxes results to reduced demand for a national need of the people thus
encouraged corruption. With these issues, there was no reduction of the fiscal
deficit. In fact, in a case like this one, it would be difficult to implement
any austerity measure on regional levels if the government is not able to
control expenditure related to the local governments.

Loss
of Economic Competitiveness

Usually,
different states will depend on each other as trading partners. Therefore, any
economic decline or improvement in the economy amongst one of the dependent
partnered will significantly affect the other states. In this regard, an
outbreak of currency crisis in Asia Brazil and also Russia increased by
borrowing money costs for markets that were significantly emerging. Furthermore,
a considerable change in Brazil had an enormous impact on the economy of
Argentina as Brazil was one of Argentina’s trading partners.

Although
Argentina was able to maintain its peg significantly, it was also not able to
respond the increasing issues regarding its economy. The reason, in this case,
is that the country counts not be able to effectively apply either the exchange
rate policy or the monetary policy in either way. In fact, at this time, the US
Dollar had appreciated to its highest level in fifteen years which led to the
straight-jacketing of the currency peg (Sandleris
& Wright, 2014). Other than that, lack of exchange rate support
mainly from nominal price and wage flexibility also contributed to reducing
ways in which Argentina could deal with currency overvaluation and also
decrease regarding the credibility of regimes with rates that are fixed.

Effects
on the Banking Sector

The
banking sector plays an essential role in the economy of any states. For
Argentina, the banking sector is ranked second. Contraction of the economy
would significantly result in negative performances and outcomes of the band.
And as the second-ranked in Argentina; this is a big problem (Schneider, Kallis & Martinez-Alier, 2010).
As a result, there was a rise in non-performing loans. It resulted in the vast
suffering of most banks in Argentina including their central bank. A surge in
non-performing loans can be as a result of some factors. These factors include;

•    Bankruptcy about a vast number of banks’
debtors

•    The conversion in relation the conversion
of currencies and the rate of converting them

•    The USD 93bn default on 23rd December of
the year 2001

By
the end of 2001, a massive number of individuals started to withdraw large sums
of dollars, particularly from their bank accounts. They proffered turning this
money from pesos into dollars and then sending them abroad. In this regard,
these banks were forced to run law thus affecting the economy negatively. This
case forced the government to enact a particular measure known as the Corralito
which allowed for only minor withdrawal of cash that was original $250 for a
week.

Conclusion

Generally
speaking, the problem of the economic crisis in Argentina was as a result of an
undesirable confluence of some economic events in the country. These factors
included a hard currency peg, fiscal policies that were not appropriate,
currency overvaluation, rigidities regarding the economy, external shock and
also vast amounts of foreign currencies borrowed that were followed by negative
influence like a sudden stop in capital inflow. All these factors together with
a number of a both social and political resulted in the crisis in Argentina to
be one of the most severe disasters in the history of the world. Other than that,
the economy of Argentina was able to recover which prevented any profound
reform to be implemented.

 This documentary represents relationship and
contributing factors that can either contribute to the success or failure of
the economy depending on how different aspects are conducted not only by the
government but also the society in general. 
In this regard, both the people and the government have a responsibility
of ensuring they maintain a positive economic development for their country
through considering particular aspects that will be of help and value to the
economy. The economy means a lot to any nation. Therefore, failure to maintain
positive growth about the economy will affect almost every part f citizens’ and
political relationship. There is a need to consider each aspect that
contributes to the successful performance of economical-related activities in
the country.