ABSTRACT
This chapter discusses financialisation in Chile, a country which stands out for the successful application of free market principles to a small open developing economy. It argues that the neo-liberal agenda pursued by different Chilean governments, since the middle of the 1970, contributed to generate a process of financialisation. Financialisation has important effects at the macroeconomic level. Inequality in the case of Chile is explained, in part, by the relationship between finance and the productive structure. The chapter explores a link between finance, and the specialisation in natural resources to the functional and personal distribution of income. The natural resource specialisation of Chile not only is a potential source of instability but also has negative effects on the functional distribution of income. According to the distribution of functional income by sector of economic activities, the financial sector accounts for 19% of total income and profits.
