Chile

Abstract

In the last two decades, the Chilean economy has been able to strengthen institutions and economic policies oriented to smoothing economic cycles and better absorb economic shocks. These policies resulted in a relatively stable economic path with an average growth rate of 5.8 per cent during 1985–2005. Volatility of growth, consumption, and investment has dropped significantly since 1985 and has subsequently stabilized. Also, economic shocks, which were not very different in nature and magnitude, produced very different outcomes, with a fall in GDP of 13 per cent in the 1981–82 crisis and of 1 per cent in the 1997–98 crisis.