A Decade Lost and Found: Mexico and Chile in the 1980s

Raphael Bergoeing, Patrick Kehoe, Timothy Kehoe and Raimundo Soto

Review of Economic Dynamics, 2002, vol. 5, issue 1, 166-205

Abstract: Chile and Mexico exoperienced severe economic crises in the early 1980s. This paper analyzes four possible explanations for why Chile recovered much faster than did Mexico. Comparing data from the two countries allows us to rule out a monetarist explanation, an explanation on falls in real wages and real exchange rates, and a debt overhang explanation. Using growth accounting, a calibrated growth model, and economic theory, we conclude that the crucial difference between the two countries was the earlier policy reforms in Chile that generated faster productivity growth. The most crucial of these reforms were in banking and bankruptcy procedures. (Copyright: Elsevier)

Keywords: Chile; Mexico; growth accounting; total factor productivity; depression (search for similar items in EconPapers)
JEL-codes: E52 N6 O40 (search for similar items in EconPapers)
Date: 2002
Note: A data appendix is availaible
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (107)

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Related works:
Working Paper: Data Appendix to A Decade Lost and Found: Mexico and Chile in the 1980s (2002)
Working Paper: A Decade Lost and Found: Mexico and Chile in the 1980s (2001)
Working Paper: A Decade Lost and Found: Mexico and Chile in the 1980s (2001)
Working Paper: A decade lost and found: Mexico and Chile in the 1980s (2001)
Working Paper: A Decade Lost and Found: Mexico and Chile in the 1980s (2001)
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DOI: 10.1006/redy.2001.0150

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