Chile’s economic crisis in 1982 was caused by a combination of external and internal factors. Among the external factors, the steep fall of the price for copper due to the global crisis was devastating, given the preponderance of copper in Chile’s total exports. The uncontrolled financial liberalization, in combination with heavy borrowing of the Chilean conglomerates, were large factors in the country’s economic recession. Credit had been incurred overwhelmingly for consumption purposes and for the takeover of enterprises, instead of investment in productive capacity. Rapidly declining growth, a growing balance-of-payments deficit, rocketing interest rates, and the insolvency of hundreds of firms in the manufacturing sector ensued. Sixteen private financial institutions (out of fifty) went bankrupt.

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 1594