- Terms of trade growth ( _tot_ ). Monthly variation of the terms of trade index, interpolated from the National Institute of Statistics and Censuses (INDEC) statistics (see Appendix B).

- Output growth ( _g_ ). Monthly variation of the seasonally-adjusted real gross domestic product, interpolated from INDEC national accounts statistics (see Appendix B).

- Inflation ( _p_ ). Monthly variation of the GDP deflator, monthly series, interpolated from INDEC national accounts statistics (see Appendix B).

- Net foreign assets ( _nfa_ ) consists of gross international reserves net of checking accounts in foreign currency and obligations with IFIs.

- Current account ( _ca_ ) data were collected from the foreign exchange market statistics of the Central Bank of the Republic of Argentina (BCRA henceforth, by its initials in Spanish).<sup>10</sup> The series is expressed in Pesos using the average reference exchange rate released by the BCRA.

- Currency held by the public ( _cp_ ) includes both Pesos and quasi-monies held by the public, seasonally adjusted. Quasi-moneis, which rescue finished in March 2004, had been issued by different provinces since 2001. By including them within _cp_ , however, we are assuming that they constitute a (contingent) liability of the central bank.

- Bonds ( _mp_ ) includes only BCRA Peso-denominated bonds. Peso-denominated bonds issued by Argentina’s Treasury held by BCRA are set aside from this definition, since variations in this item could well respond both to quantities (open market operations) or prices, and the latter are particularly volatile for the country under study. Thus, Public bonds in Table 1 go within other items.

- Commercial banks’ liquidity ( _li_ ) includes checking accounts in Pesos at BCRA, domestic currency held by banks (i.e., cash in vaults), and reverse repos net of (i) repos and (ii) iliquidity rediscounts.<sup>11</sup>

> 10The data come from the “Mercado  ́Unico Libre de Cambios”. There are multiple reasons that justify this decision, among them the fact that the balance of payments computes trade in goods at the time of embarkment while the exchange market computes it when the foreign-currency transaction is liquidated, and because the latter is calculated on a cash basis rather than on a accrued basis, and thus appropriately captures the transactions that influence the exchange rate within each period of time. Fortunately, foreign exchange market statistics are available at a monthly frequency (as opposed to the quarterly data provided by National Accounts statistics). For the differences between the balance of payments statistics released by the Direction of National Accounts and the data used here from the foreign exchange market elaborated by the BCRA, see `http://www.bcra.gov.ar/pdfs/estadistica/diferencias.pdf` (in Spanish).

11 Note that the supply of net reverse repos is not taken into account within _mp_ . Behind this choice stands the claim that the supply of net reverse repos is perfectly elastic, their quantity being determined solely by the demand of commercial banks. It must be noted, however, that this is not justified on the grounds of there being ‘implicit costs’ (Nakashima [27]) in discount-window borrowing that discourage commercial banks from borrowing infinite quantities when the discount rate is below short-term interest rates. Contrary to the case of the United States, for the period under analysis commercial banks in Argentina were net discount-window _lenders_ to the monetary authority. The underlying assumption 11