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Revista de Economia Política

On-line version ISSN 1809-4538

Abstract

CUNHA, Patrícia Helena F.  and  GALA, Paulo. From populism to exchange rate bands: the evolution of exchange rate policy in Chile from 1970 to 1999. Rev. Econ. Polit. [online]. 2009, vol.29, n.3, pp. 35-53. ISSN 1809-4538.  http://dx.doi.org/10.1590/S0101-31572009000300003.

We discuss in this paper the evolution of exchange rate policy in Chile since the seventies, with special attention to overvaluation and undervaluation cycles. Following a recent literature that argues in favor of competitive currencies as part of a development strategy, we argue that the Chilean exchange rate policy in the years that go from 1984 until 1999 were very important to its growth results. Chile even managed to go through the nineties without a major external crisis, especially when compared to its Latin American neighbors. We argue here that the exchange rate crawling band adopted in the middle eighties and nineties was important for its growth strategy.

Keywords : exchange rate policy; exchange rate levels; crawling bands; Chile.

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