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The Macroeconomics of Populism in Latin America

Again and again, Latin America has seen the populist scenario played to an unfortunate end. Upon gaining power, populist governments attempt to revive the economy through massive spending. After an initial recovery, inflation reemerges and the government responds with wage an price controls. Shortages, overvaluation, burgeoning deficits, and capital flight soon precipitate economic crisis, with a subsequent collapse of the populist regime. The lessons of this experience are especially valuable for countries in Eastern Europe, as they face major political and economic decisions.

Economists and political scientists from the United States and Latin America detail in this volume how and why such programs go wrong and what leads policymakers to repeatedly adopt these policies despite a history of failure. Authors examine this pattern in Argentina, Brazil, Chile, Mexico, Nicaragua, and Peru—and show how Colombia managed to avoid it. Despite differences in how each country implemented its policies, the macroeconomic consequences were remarkably similar.

Scholars of Latin America will find this work a valuable resource, offering a distinctive macroeconomic perspective on the continuing controversy over the dynamics of populism.

Table of Contents

Introduction by Rudiger Dornbusch and Sebastian Edwards
Part I. The Framework
1. The Macroeconomics of Populism
Rudiger Dornbusch and Sebastian Edwards
2. The Political Economy of Latin American Populism
Robert R. Kaufman and Barbara Stallings
Comment: Paul W. Drake
Comment: Alberto Alesina
3. Populism, Profligacy, and Redistribution
Eliana Cardoso and Ann Helwege
Comment: William R. Cline
Part II. Country Experiences
4. Description of a Populist Experience: Argentina, 1973-1976
Federico A. Sturzenegger
Comment: Guido Di Tella
5. What Have Populists Learned from Hyperinflation
Rosque B. Fernández
Comment: José De Gregorio
6. Sixty Years of Populism in Brazil
Paulo Rabello de Castro and Marcio Ronci
7. The Socialist-Populist Chilean Experience: 1970-1973
Felipe Larraín and Patricio Meller
Comment: Simón Teitel
8. Populism and Economic Policy in Mexico, 1970-1982
Carlos Bazdresch and Santiago Levy
Comment: Enrique Cárdenas
9. The Illusion of Pursuing Redistribution through Macropolicy: Peru’s Heterodox Experience, 1985-1990
Ricardo Lago
Comment Javier Iguíñiz-Echeverría
Comment: Miguel A. Savastano
10. Collapse and (Incomplete) Stabilization of the Nicaraguan Economy
José Antonio Ocampo
Comment: Ann Helwege
Comment: Arnold C. Harberger
11. On the Absence of Economic Populism in Colombia
Miguel Urrutia
Comment: Juan L. Cariaga
Comment: Guillermo A. Calvo
Name Index
Subject Index

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