Stabilization policies and trade liberalization: a comparative analysis of Chile, Argentina and Mexico’s experiences

Cláudio Gontijo ()

Brazilian Journal of Political Economy, 1995, vol. 15, issue 1, 41-57

Abstract: This article examines Chile’s 1976-81, Argentina’s 1987-92, and Mexico’s 1982-92 stabilization experiences. In these three cases high inflation was curbed after orthodox stabilization policies with liberal structural reforms had been followed by using a fixed exchange rate as an “anchor” for the price level. It suggests the existence of a trade off between internal and external equilibria. Orthodox stabilization policies can be very successful in equilibrating the balance-of-payment without producing price level stability. In contrast, curbing high inflation may require fixing the exchange rate, which, combined with trade liberalization, may produce huge commercial deficits. JEL Classification:

Keywords: Stabilization; inflation; exchange rate regime (search for similar items in EconPapers)
Date: 1995
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