Institution shocks and economic outcomes: Allende's election, Pinochet's coup and the Santiago stock market

• 成果类型: Article
• 署名作者: Girardi, Daniele; Bowles, Samuel
• 署名单位: University of Massachusetts System; University of Massachusetts Amherst; The Santa Fe Institute
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2018.04.005
• 发表日期: 2018
• 页码: 16-27
• 关键词: Institutional shocks; natural experiment; Share prices; chile; Socialism; Military coup; ELECTIONS

摘要

To study the effect of political and institutional changes on the economy, we look at share prices in the Santiago exchange during the tumultuous political events that characterized Chile in the early 1970s. We use a transparent empirical strategy, deploying previously unused daily data and exploiting two largely unexpected shocks which involved substantial variation in policies and institutions, providing a rare natural experiment. Allende's election and subsequent socialist experiment decreased share values, while the military coup and dictatorship that replaced him boosted them, in both cases by magnitudes unprecedented in the literature. The most parsimonious interpretation of these share price changes is that they reflected, respectively, the perceived threat to private ownership of the means of production under a socialist government, and its subsequent reversal.