Macroeconomic policies, sector performance and firm response: the case of Chile's textile goods market

Includes bibliography

Resumen Traditionally, economic literature has treated macroeconomic theory separately from the evolution of the microeconomic structure. However, the structure of the economy cannot be explained in terms only of macro factors or only of micro factors since each has a major influence on the other. It is important, therefore, to develop a greater linkage between the two in order to arrive at a better understanding of the interactions between macro factors and the microeconomic structure, especially the links between changes in macroeconomic policy and entrepreneurial decisions and firm behavior. This paper explores the macro policy-micro behavior nexus in a Latin American context in the textile goods market. The first section of the paper is an overview of the macroeconomic environment of Chile during the second half of the 20th century. Its focus is on economic and commercial policy because of the importance that trade barriers and exchange rates are thought to have for the performance of the manufacturing sector. The second section explores the evolution of Chile`s textile and garment sector which is the sector that has been selected for study. The last section is a case study describing the response and behavior of a leading textile firm, throughout its history, in Chile.