In this essay, I argue that the explosion of inflation during the Salvador Allende
administration in Chile (above 1,500% on a six-month annualized measure)
was predictable. The government’s use of massive and strict price controls
generated acute macroeconomic imbalances. I postulate that the combination
of runaway inflation, shortages, and black markets generated major hostility
among the middle class and that that unhappiness reduced the support for the
Unidad Popular government.
Keywords:
Socialism, Salvador Allende, Devaluation, Hyperinflation, Chile, Price controls, Unidad Popular
Edwards, S. (2024). Runaway Inflation in Chile, 1970-1973. Estudios De Economía, 51(2). Retrieved from https://revistas.uchile.cl/index.php/EDE/article/view/76966
