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Macroeconomic populism in Chile: Allende and the recession of 1973
Published online by Cambridge University Press: 06 August 2025
Abstract
This paper commemorates the 50th anniversary of the 1973 recession during Salvador Allende’s government by offering a comprehensive analysis of macroeconomic populism. Focusing on the lessons from this historical episode, it is argued that the lax economic policies in 1970 and 1971 triggered the boom of 1971, culminating in a financial crisis in 1972 and an economic recession in 1973. The examination encompasses an evaluation of Chilean macroeconomic populism, delving into the impact of these lax policies on the business cycle. Furthermore, it addresses prevalent misinterpretations of the 1973 recession in the context of recent Latin American events. The paper concludes by extrapolating broader insights from the Chilean experience, offering valuable lessons for shaping effective economic policies in Latin America.
Resumen
Este artículo conmemora el 50 aniversario de la recesión de 1973 durante el gobierno de Salvador Allende, ofreciendo un análisis exhaustivo del populismo macroeconómico. Enfocándose en las lecciones de este episodio histórico, se argumenta que las políticas económicas laxas de 1970 y 1971 desencadenaron el auge de 1971, culminando en una crisis financiera en 1972 y una recesión económica en 1973. La investigación abarca una evaluación del populismo macroeconómico chileno, profundizando en el impacto de estas políticas laxas en el ciclo económico. Además, aborda interpretaciones erróneas prevalentes sobre la recesión de 1973 en el contexto de eventos recientes en América Latina. El artículo concluye extrapolando perspectivas más amplias de la experiencia chilena, ofreciendo lecciones valiosas para la formulación de políticas económicas efectivas en América Latina.
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- © The Author(s), 2025. Published by Cambridge University Press on behalf of Instituto Figuerola de Historia y Ciencias Sociales, Universidad Carlos III de Madrid.
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