Chile and the Global Depression
https://doi.org/10.21845/comp/2011/1/10
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Abstract
The 2007-2009 economic crisis ended an exceptional, five year-long economic boom for Chile and other countries in Latin America. The most beneficial economic outcome of the upswing was the fundamental improvement of the region’s countries in terms of the current crisis, which greatly reduce these countries’ vulnerability to external economic shocks. Based on the previous assumption several economists shared the opinion that “This time things are different”. That is, the fate of the continent in the current crisis will be decided differently as the global downturn has barely affected the region’s economic indicators. However, from September 2008 it has become apparent that the continent’s economy remains vulnerable. The crisis, which has infected the real economy through multiple channels, has reached two major victims of the recession, - Latin America and Central and Eastern Europe – leaving them with a decline in GDP per capita and the slowdown of economic growth. Conversely, Chile experienced a decline of a lesser extent due to its structural reforms and was able to re-orientate to its previous growth path much quicker than the rest of the continent’s economy after the ending of the crisis.
JEL classification: O54, H12, O20
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