Stabilization strategies: Peru

ABSTRACT

Written just before the new president of Peru, Alberto Fujimori, takes the position, this article incorporates the necessity of banish the populism and take emergencial measures together with long-run measures in order to obtain an effective stabilization of the economy. It emphasizes what could be considered consensus among the economists from countries that have experienced chronic inflation: equilibrium of budget deficit, shock therapy, necessity of income policy. It is concluded that in spite of the costs of an adjustment to be done, the less privileged classes will suffer much less than in continuous inflationary context.

KEYWORDS:
Stabilization; political economy; Peru