The History Of Latin America's Debt Crisis

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The debt crisis of 1982 was the most serious of Latin America's history. Incomes dropped; economic growth stagnated; because of the need to reduce importations, unemployment rose to high levels; and inflation reduced the buying power of the middle classes.[5] In fact, in the ten years after 1980, real wages in urban areas actually dropped between 20 and 40 percent.[7] Additionally, investment that might have been used to address social issues and poverty was instead being used to pay the debt.[1] In response to the crisis most nations abandoned their import substitution industrialization (ISI) models of economy and adopted an export-oriented industrialization strategy, usually the neoliberal strategy encouraged by the IMF, though there are

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