Crisis of 1982

[1] After the socialist reorientation of the economy during the presidency of Salvador Allende, economic sabotage by the Nixon presidency,[2] and the subsequent Chilean economic crisis which reached its zenith during 1973,[3]: 35–45  the Armed Forces following the orders of the military junta and with the support of the United States government executed a coup d'état and demobilized the forces loyal to Allende like the Revolutionary Left Movement.

[5]: 26 The 1982 crisis has been traced to the overvalued Chilean peso, which had been helped by being pegged to the US dollar, and to the high interest rates in Chile, which would have hampered investment in productive activities.

[3]: 49–62 In the years after the crisis, the economic policy of the dictatorship changed to include price bands for some foodstuffs and a floating exchange rate.

[7]: 66 Supporters of the neoliberal policy of the military dictatorship have argued that the crisis started outside Chile and hit the whole of Latin America in the so-called La Década Perdida (The Lost Decade).

[3]: 49–62  In contrast, economist Milton Friedman blames precisely the country's departure from the neoliberal model and political interventions in matters such as the Chilean peso.

[10] According to Ricardo Ffrench-Davis, the "unnecessary" radicalism of the shock therapy in the 1970s caused mass unemployment, loss of purchasing power, extreme inequalities in the distribution of income, and severe socioeconomic damage.