Chile's experience with stabilization, revisited

This paper evaluates Chile's stabilization policies since the early 1970s. Four episodes are examined: (a) the high inflation at the beginning of the military regime when inflation was close to 1000 percent per year; (b) the orthodox stabilization program of 1975; (c) the exchange rate-based stabilization of February 1978-June 1982; and (d) the post-1984 adjustment period with a large real devaluation and low inflation. Finally an overall evaluation of the post-1973 experience with stabilization is provided.