Little progress has been made so far to understand the causes of Argentina's worst socio-economic crisis. This paper analyzes the intellectual roots of Argentine Convertibility as a small contribution to this necessary and pending discussion. The country implemented a radical monetary reform, technically known as a currency board, although its popular name was ''Convertibility'', allegedly launched to impose fiscal discipline and gain credibility. This paper argues that it is very important to understand Argentina's problems with the currency board since they reveal major flaws in its underlying theoretical model which is based on the assumptions of rational expectations cum natural rate of unemployment.
 
February 07, 2008.