15-25 percent) and slashed the public payroll (50 percent be- tween 1973 and '77), boosted taxes, and slowed money supply growth. During the next three years, inflation plunged from 340 percent to 30 percent annually. Economic growth accelerated to a 7.3 percent an- nual rate in 1978. Some economists began talking about a "Chilean economic miracle."
By early 1982, however, that talk had been silenced. Industrial out- put fell sharply, unemployment climbed to 23 percent, and bankrupt-...