> was it all García's fault? hyperinflation usually doesn't result from
> goverment or central bank mistakes as much as from civil wars, civil
> unrest, and the like, which make it hard for a government to collect
> taxes or to cut expenditures -- so that they are _forced_ to "run the
> printing presses," causing hyperinflation. Garcia was trying to deal
> with Sendero Luminoso and other social conflicts, no? isn't that what
> caused the hyperinflation?
To some degree, is is a chicken-and-egg question. Did social conflict give rise to economic instability? Or did economic problems cause social unrest. The Wikipedia article suggests the latter. The figures I've seen indicate a there was a massive increase in poverty during his tenure, and this is apparently what fueled the rise of SL.
Although some things were obviously out of his control, such as the amount of foreign debt he inherited from previous adminstrations, García made some notable screwups, such as the big public announcement about the 10% debt repayment ceiling (apparently it would have been much better to negotiate in quiet) and printing money to keep salaries high -- primarily to bolster his popularity.
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Colin Brace
Amsterdam