The Effects of the International Financial Crisis on the Chilean Economy

Leonardo Hernández and Pamela Mellado

Journal Economía Chilena (The Chilean Economy), 1998, vol. 1, issue 2, 019-040

Abstract: This paper analyzes the effects on Chile of the international financial crisis that started in mid 1997 and evaluates the policies adopted by the economic authorities during 1998 in response to them. The channels of contagion evolved in tandem with the crisis, shifting from trade-related effects (lower international commodity prices) to finance-related consequences (more costly and less available foreign finance). The policy response has been aimed at reducing the current account deficit and making the Chilean economy less vulnerable. The paper concludes that the temporary cost in terms of lower growth is worth paying for, avoiding a surge in domestic inflation and more importantly, reducing the likelihood of a future balance-of-payments crisis, with much higher future employment and output costs.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://si2.bcentral.cl/public/pdf/revista-economi ... 2dic1998p019-040.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchec:v:1:y:1998:i:2:p:19-40

Access Statistics for this article

Journal Economía Chilena (The Chilean Economy) is currently edited by Álvaro Aguirre, Sofía Bauducco and Andrés Fernández

More articles in Journal Economía Chilena (The Chilean Economy) from Central Bank of Chile Contact information at EDIRC.
Bibliographic data for series maintained by Fredherick Sanllehi ().