The paper uses a computable general equilibrium model to analyze the growth path of the Chilean economy. During the period 1977-1981 a package of reforms liberalized international trade and removed restrictive labour legislation. As a result of the reforms, the economy enjoyed unprecedented...

Firms in emerging markets are exposed to severe financial frictions and credit constraints, that are exacerbated by the sudden stop of capital inflows. Can monetary policy offset this external credit squeeze? We show that although this may be the case during moderate contractions (or in partial...