EXCHANGE RATE POLICIES, BALANCE OF PAYMENTS, AND TRADE RESTRICTIONS IN CHILE.

Most of the discussion of exchange rate policies centers around the currencies of the United States, Great Britain, France, and other relatively highly developed economies. This is unfortunate. In the more highly developed economies the comparatively high degree of monetary stability which has existed in recent years has pushed into the background some of the fundamental economic relationships among monetary and fiscal policies, exchange rate policies, balance of payments problems, and trade restrictions. It may be that these relationships will show up in better focus in the economic laboratories provided by some of the less developed countries. In the latter countries inflation is likely to be the order of the day, Also, there is likely to be much less concern in any one of these countries over the impact of its alternative international exchange policies on the rest of the world. This paper is a survey of the experiences of the Republic of Chile in these areas from the 1920's through 1962. It attempts to piece together the relationships among exchange rate policies, the balance of payments, and trade restrictions as they became evident over time. More attention is focused on the 1959-62 period than on the pre-1959 period, because of time and space limitations and because more data are available for the former. We look first at the economic and political background against which the survey is set. The basic theoretical framework of the survey is presented next. Third, the pre-1959 experience is considered. Fourth, the 1959-62 period is examined. [ABSTRACT FROM AUTHOR]