ABSTRACT
Like Chile, the Jamaican economy trajectory was one of abrupt decline and sustained recovery (Table 5.1), albeit a very fragile recovery. Both countries launched a populist boom in the early 1970s which, consistent with the stylized facts (Figure 2.3) traced by Sachs (1989), brought an abrupt economic deterioration in its wake. Also, they both embarked on orthodox adjustments in the mid-1970s, Chile some three years ahead of Jamaica which began in 1977. Yet whereas Chile had recovered strongly by the late 1980s, Jamaican recovery was still fragile. At first sight the inferior Jamaican trajectory appears the more puzzling because, unlike Chile, Jamaica experienced a gain in its terms of trade after the first oil shock, if only a very modest one (Table 5.1). Jamaica also enjoyed potentially more favourable political and economic pre-conditions in the early 1970s than Chile did.
