Chile: An Economy in Transition

Chile: An Economy in Transition

Chile: An Economy in Transition

Chile: An Economy in Transition

Excerpt

Chile's experience during the 1930's provides a topic of special interest to the economic investigator. A small country, exporting some 30-40 per cent of her total production, she was especially vulnerable to depressed conditions in world markets because of her extreme dependence upon nitrates and copper, which in 1929 comprised some three-fourths of her total exports. The collapse of the markets for these raw materials, together with the rapid drying up of foreign loans, destroyed all semblance of equilibrium in the country's balance of payments. A period of heavy gold losses and sharp deflation lasted until the middle of 1931, when, in desperation, Chile first defaulted on her foreign debt and then introduced exchange control.

While these measures served to equalize her import and export transactions, they did so at a very low level. The value of exports remained at approximately one-fourth the 1929 figure, causing serious unemployment in the mining centers and, by its repercussions, in all branches of economic activity. The constant deterioration of conditions brought with it extreme political instability; during 1931 and 1932 there was continuous political turmoil, involving overturn of governments, incessant cabinet changes, exiling of political leaders, and even the outbreak of armed conflict.

Finally, this period of chaos came to an end with the reestablishment in December 1932, of constitutional government under the newly elected Alessandri regime. From then on, conditions at first gradually, then rapidly improved, until by the end of 1935 Chile's unemployment problem was virtually solved. Thereafter ensued several years of rather rapid . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.