any other Argentine economist had researched Argentine business cycles to any meaningful degree, it also demonstrated that – while international and Argentine markets were no doubt linked – there were an interaction of factors unique to Argentina that were absent in European business cycles. A narrow base of taxation and a severe lack of domestic capital markets, both consequences arising from Argentina’s inability to effectively implement property taxes, made Argentina extremely reliant on international borrowing. Argentina then, was faced with intrinsic psychological, political, and government policy differences that were unique to its situation. A rise in interest rates alone could not and did not reverse capital outflows, nor was it enough to attract new investment. Prebisch noted that this research “projected a new perspective” 170 on Argentina’s monetary problems. And it was in his written response to these findings, an article titled ‘ Notes on Our Money Supply’ 171 , that he first used the terms centre and periphery . Although in this case used in the context of the relationship between Buenos Aires and Argentina’s dependent interior republic, Prebisch would similarly apply the terms not just to Argentina – and its status as a periphery country to Britain – but also to all underdeveloped countries, affirming their status in the international economy and the relationship they experienced with developed countries in the centre. Prebisch’s idea of there being two interrelated elements in the world economy – the centre and the periphery – was revolutionary because it contradicted the dominant neoclassical trade theory that was popular at the time. It suggested that, rather than there being a mutually beneficial set of relationships that linked global trade and the economies of the world together, there was in fact asymmetry in the global economic system. This asymmetry would manifest itself in multiple ways, but there existed several characteristics that distinguished centre and periphery economies. Firstly, centre
170 Dosman, The Life and Times of Raúl Prebisch 1901-1986, page 38. 171 See 2.
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