Publication

This note compares the impact of the financial and economic crisis in Chile and Mexico. The effects of the global financial crisis was felt in both countries during the third quarter of 2008, despite expectations that Latin America would not be affected. It increased unemployment and inflation, reduced incomes, and partially wiped away the meager gains in poverty alleviation and income distribution obtained during 2002-2007. All in all, the author concludes that Chile suffered a relatively milder impact from the crisis because as a commodity exporter it had better terms of trade.