Pinochet’s economists bettered a Shakespeare play
General Pinochet’s ‘boys’ got it terribly wrong. The policies formed by a group of economists, termed as the ‘Chicago Boys’, appointed by the military government of Pinochet, soon saw Chile at the gates of a debilitating debt crisis. Their policies, like large scale privatisation and liberalisation of capital account, paved the way for huge inflow of foreign capital; but that literally added a huge slice to Chile’s debt everyday, without supporting structural protective measures. And when this inflow suddenly dropped (largely due to recession in the US) and turned into a rushing outflow in 1982, it upturned the economy as if a twister had hit it. It left Chile gasping for breath under an immediate $17.2 billion debt load (one of the highest per capita debt in the world at that time) which kept growing. With a soaring current account balance and high debt servicing burden, the country’s banking system got crippled. The busting of the global copper market too had its explosive effect. It wasn’t just that the Chicago Boys had got it all wrong; it almost seemed that they had worked pretty hard to use a so-named ‘automatic adjustment by using market dynamics’ strategy destroy the military junta government’s reform measures.
General Pinochet’s ‘boys’ got it terribly wrong. The policies formed by a group of economists, termed as the ‘Chicago Boys’, appointed by the military government of Pinochet, soon saw Chile at the gates of a debilitating debt crisis. Their policies, like large scale privatisation and liberalisation of capital account, paved the way for huge inflow of foreign capital; but that literally added a huge slice to Chile’s debt everyday, without supporting structural protective measures. And when this inflow suddenly dropped (largely due to recession in the US) and turned into a rushing outflow in 1982, it upturned the economy as if a twister had hit it. It left Chile gasping for breath under an immediate $17.2 billion debt load (one of the highest per capita debt in the world at that time) which kept growing. With a soaring current account balance and high debt servicing burden, the country’s banking system got crippled. The busting of the global copper market too had its explosive effect. It wasn’t just that the Chicago Boys had got it all wrong; it almost seemed that they had worked pretty hard to use a so-named ‘automatic adjustment by using market dynamics’ strategy destroy the military junta government’s reform measures.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
