Inflation and the Corruption of Currency in Latin America: Chile, 1970–1973

In this article I analyze Salvador Allende’s economic program and policies. I argue that the explosion of inflation during his administration (above 1,500% on a six-month annualized measure) was predictable, and I show that the government’s response to it was political. I postulate that runaway inflation generated major disaffection among the middle class and that that unhappiness paved the way to Pinochet’s coup d’état in 1973.