NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Macroeconomic Populism in Latin America

Rudiger Dornbusch, Sebastian Edwards

NBER Working Paper No. 2986 (Also Reprint No. r1543)
Issued in May 1989
NBER Program(s):   ITI   IFM

Macroeconomic populism is an approach to economics that emphasizes growth and income distribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies. The purpose of our paper is to show that policy experiences in different countries and periods share common features, from the initial conditions, the motivation for policies, the argument that the country's conditions are different, to the ultimate collapse. Our purpose in setting out these experiences, those of Chile under Allende and of Peru under Garcia, is not a righteous assertion of conservative economics, but rather a warning that populist policies do ultimately fail; and when they fail it is always at a frightening cost to the very groups who were supposed to be favored. Our central thesis is that the macroeconomics of various experiences is very much the same, even if the politics differed greatly.

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Document Object Identifier (DOI): 10.3386/w2986

Published: "Macroeconomic Populism." From Journal of Development Economics, Vol. 32,pp. 247-277, (1990).

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