Publisher's Synopsis
In recent years, Chile has managed to reduce its fiscal deficit, carry out far-reaching structural adjustments, liberalize labour markets, adjust real wages to make them internationally competitive, and reduce or eliminate tariffs as well as nontariff barriers to trade. Taking Chile's success as a reference point, this book examines the effects of macroeconomic conditions on opening up the economies of Chile and three other Latin American countries: Argentina, Brazil and Uruguay.;The authors show that the latter three countries were able to generate current account surpluses in their balance of payments but had difficulty in capturing domestic savings to achieve an effective transfer of resources. The studies on Argentina and Brazil emphasize short-term issues, particularly the relationship between openness and stabilization policies. The Uruguayan study focuses in part on the effect of the MERCOSUR integration process on Uruguayan trade.;While each country's approach to trade liberalization has varied depending on its own concerns and experiences, an important conclusion for all four countries is that elimination of the public sector deficit is essential to the success of open and stable economies. The studies also underscore the importance of maintaining public investment as a policy instrument and having sufficient public sector savings to transfer resources domestically without major inflationary pressures.
