ABSTRACT
Central America is passing through an economic crisis of unprecedented proportions. After enjoying the steadiest economic growth in Latin America for nearly three decades, all the countries in the region, regardless of the severity of their military-political convulsions, have entered into a prolonged economic crisis. Some observers of the Central American crisis, taken in by the rhythm of economic growth between 1950 and 1978, assert that the problem is not the inequality of economic structures, but a lack of internal democracy in the various countries. The economic crisis began to make itself felt in the 1970s. An important factor in the economic growth in Central America between 1950 and 1970 was the conservative management of the economy at a time when the terms of trade were favorable. The stability depended on management of four macroeconomic factors: the balance of payments, the balance between supply and demand, the fiscal balance, and the monetary balance.
