Latin American Experiments in Neoconservative Economics by Alejandro Foxley

By Alejandro Foxley

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The consequences of its alternative radical counterpart will be observed in the next chapters dealing with the Chilean case. A second constraint facing policymakers, besides the high importance of domestic vis-à-vis external demand, was the predominant role played by public investment in Brazil. This was recognized, and in fact public investment played a significant countercyclical role. This was another sign of a movement away from rigid orthodoxy in the Brazilian case. 7 Source: M. C. Tavares and L.

Ffrench-Davis, "Políticas de comercio exterior en Chile 19731978," CIEPLAN (mimeo), Santiago, 1979. (9) M1: Rate of growth nominal money supply, defined as currency plus demand deposits; Central Bank of Chile. (10) M2: Rate of growth nominal money supply, defined as currency plus demand and time deposits; Central Bank of Chile. (11) inon: Thirty-day nominal interest rate; Central Bank of Chile. " (13) w: Real wages and salaries index based on CPI and official figures for nominal wages and salaries; INE.

It also represents a new approach to economic policies as a response to the inherited economic crisis. The questions that now arise are why this economic crisis developed and what were the factors behind it. We shall now explore these in more detail. It is no mystery that import substitution industrialization (ISI) had run into trouble by the mid-1960s in those countries in Latin America that had most consistently followed these policies in the postwar period. 3 Relative prices had been extensively used as a means of financing industrialization in Latin America.

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