Volume 2018 Number 125
  • E-ISSN: 16840348


This article analyses the Chilean government’s response to the 1999 recession that followed on from the Asian financial crisis, focusing on the macroeconomic policy reforms adopted and the institutional factors that influenced this response. The analysis is based on a review of previous research on the topic and suggests that some fiscal and monetary policies adopted during 1997-1998 exacerbated the effects of what were initially external shocks. However, fiscal discipline and the robust public institutions developed before and after the recession strengthened Chilean social protection policies. Specifically, public debt reduction in the 1990s, the Copper Revenue Stabilization Fund (FEC) set up in 1985, the structural surplus fiscal rule introduced in 2000 and the new monetary, exchange-rate and fiscal policy mix of that decade reduced the vulnerability of Chile to new shocks.

Related Subject(s): Economic and Social Development
Countries: Chile

You do not have access to article level metrics. Please click here to request access

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error