Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book reviews the more extensive stabilization and liberalization efforts of Chile and Argentina in the 1970s and discusses their problems in light of the more successful policy reform experiences of Taiwan and South Korea in the 1960s. It examines Brazil’s macroeconomic policy behavior and its consequences in comparison to the developments in Taiwan and South Korea. The book also reviews the policy and institutional reforms in the East Asian countries that enabled a sustainable pattern of economic growth, and the relative lack of such reforms in the Latin American countries that led to the perpetuation of recurrent balance of payments crises, persistent inflation, and sluggish economic growth. It discusses the differing policy responses to the worsening external environment that occurred in the 1970s and the resulting further divergence of economic conditions in East Asia and Latin America.