Abstract

Chile has grown at an annual rate of 7% over the past decade. Income distribution, however, deteriorated for the poor and middle class before the economy reached full capacity, when real wages began to rise and unemployment to fall. Growth has been export-led, putting pressure on stocks of native forests and fishery and mining resources. Environmental quality worsened before 1990. Reversing these trends would require extra investments on the order of 1% of GDP over many years.