Inflation and political instability in eight Latin American countries 1946-83

The path of consumer price rises is compared with data for the incidence of political change and the frequency of military regimes from 1946 to 1984 for the following countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay and Venezuela. A highly significant connection between the frequency of military government and the level of inflation is found. This appears to be due to two other significant results: (i) The military regimes are relatively unstable ones. (ii) Inflation normally turns upwards under civilian and downwards under military regimes, i.e., the military regimes are relatively strong in fighting inflation. Finally, it is demonstrated that few regimes survive a spell of hyperinflation. Copyright Martinus Nijhoff Publishers 1987