ABSTRACT
In several parts of the book, we have alluded to the effects of fiscal and monetary policy on the economies of Latin America. In addition, we have mentioned that some of the chronic economic instability in the region can be linked to inappropriate macroeconomic policies. In this chapter, we begin to explore these problems in more depth. However, one needs to be aware that with respect to macroeconomic policy, it is not possible to take the long historical view that was used in some previous chapters. Macroeconomic data is very incomplete prior to 1945. The result is that our discussion of macroeconomics for the region refers to the post-war world. In this case, this is less of a problem for Latin America. Macroeconomic imbalances developed in the region from the 1950s to 1970s which culminated in serious economic difficulties in the 1980s. These effects linger in the region in the twenty-first century. The result is that a more truncated history of macroeconomics is not as inappropriate as it would be for another subject, such as commodities. Not accidentally, the time period under consideration is the same as was used for ISI. The two issues are not quite inseparable, but they are definitely related to one another.
