Business Case Studies & Business Publications

Chile: A Changed Jungle for the Latin Am...

Li, Wei, Matte, Jo...

Case

Chile: A Changed Jungle for the Latin American Tiger (Abridged)

Li, Wei; Matte, Jose Joaquin

BP-0458 | Published August 27, 2002 | 15 pages Case

Collection: Darden School of Business

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In the early 1990s, in the context of massive foreign capital inflows, the Chilean government restricted the flow of capital into the country to achieve a competitive and stable exchange rate and to control inflation. By the late 1990s, with the onset of the financial crises in emerging market economies, investors began to pull their capital out of Chile and other emerging markets indiscriminately. This sudden reversal of capital flows was threatening to ignite a balance-of-payments crisis in Chile. The government must decide what to do. See also two related cases, "Chile: A Jungle for the Latin American Tiger (A)" (UVA-BP-0461) and "Chile: A Jungle for the Latin American Tiger (B)" (UVA-BP-0462).