Runaway Inflation in Chile, 1970-1973

Sebastian Edwards ()

Estudios de Economia, 2024, vol. 51, issue 2, 383-416

Abstract: In this essay, I argue that the explosion of inflation during the Salvador Allende administration in Chile (above 1,500% on a six-month annualized measure) was predictable. The government’s use of massive and strict price controls generated acute macroeconomic imbalances. I postulate that the combination of runaway inflation, shortages, and black markets generated major hostility among the middle class and that that unhappiness reduced the support for the Unidad Popular government.

Keywords: Socialism; Salvador Allende; devaluation; hyperinflation; Chile; price controls; Unidad Popular (search for similar items in EconPapers)
JEL-codes: B22 E52 E58 F31 F33 (search for similar items in EconPapers)
Date: 2024
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