Policies·pe_paquetazos_stabilisation_1988_1989

Paquetazos stabilisation packages (Peru, 1988-1989)

PER·1988 – 1989candidate

movestransfer expansion↓spending level↓monetary expansion direction↓

What the policy did

"Paquetazo" of September 1988 (Abel Salinas) devalued inti 85%, raised fuel prices 400%, and doubled transport fares. Further "paquetazo" November 1988 and March 1989. Produced July 1988 riots. GDP fell -8.3% (1988), -11.7% (1989). Stabilisation failed; hyperinflation accelerated into mid-1990 handover.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended

↓

transfer expansion

fiscal.transfer_expansion

Size of cash and near-cash transfer programmes (unemployment benefits, means-tested assistance, universal child benefits). Architecturally distinct from forced-saving schemes — see condition welfare_architecture.

decreased · moderate

smaller transfer footprint

Price subsidies slashed.

↓

spending level

fiscal.spending_level

General government spending as share of GDP, excluding transfers already captured under fiscal.transfer_expansion to avoid double-counting.

decreased · weak

lower spending share

↓

monetary expansion direction

monetary.monetary_expansion_direction

Direction of monetary-base expansion decisions relative to trend. Separate from fiscal.transfer_expansion even when correlated.

decreased · weak

contractionary (balance sheet shrink, rates above Taylor)

Nominal tightening inadequate; real rates remained negative.

Enacted by

peru_garcia_apra_first_1985_1990

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Truss 2022 mini-budget shows that unfunded fiscal expansion above the ZLB triggers sharp bond-market and currency responses through expected-inflation and risk-premium channels.

unfunded_fiscal_expansion_above_zlb_bond_market_responseinferred

viafiscal.spending_levelmonetary.monetary_expansion_directionfiscal.transfer_expansion

SUPPORTED — GBP/USD trough on 2022-09-26 (1.0703) was 5.02% below the 2022-09-22 pre-announcement close (1.1269); log-decline +0.0515 clears the 3.0% threshold …

supported

Across the 2008-2014 ZLB era and the 2020-2021 pandemic-response window, large-scale de-facto monetary finance of fiscal expansion in the US, Japan, and the Eurozone did not produce headline-CPI inflation consistent with naive quantity-theoretic monetisation predictions: cumulative central-bank balance-sheet expansion exceeded 15% of GDP while CPI YoY remained below 3% in each economy across both windows.

monetary_finance_zlb_no_inflationinferred

viamonetary.monetary_expansion_directionfiscal.spending_levelfiscal.transfer_expansion

REFUTED — CPI threshold breach: USA zlb_2008_2014 peak 3.81% in 2008; USA covid_2020_2021 peak 4.68% in 2021; Eurozone CPI not loaded

refuted

Fiscal multipliers are state-dependent: large at ZLB, small near full employment; no single-number answer is policy-relevant.

fiscal_multipliers_state_dependentinferred

viamonetary.monetary_expansion_directionfiscal.spending_levelfiscal.transfer_expansion

REFUTED — sign - OPPOSITE claim +, cumulative_effect=-1.569, h=5, p_h=0.0155

refuted

The Soviet central-planning system, having already exhibited TFP stagnation 1970-1989, underwent a canonical institutional and economic collapse 1989-1998 as plan-enforcement was withdrawn without functioning market institutions in place.

soviet_union_central_planning_gdp_collapse_1989_1991inferred

viamonetary.monetary_expansion_directionfiscal.spending_level

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['derived: count of canonical_metrics with threshold met']

run pending

Across OECD economies 1995-2021, the cumulative fiscal multiplier on real output at the zero lower bound (defined as quarters with policy rate ≤ 0.50% AND inflation expectations anchored below 2.5%) exceeds 1.2 at horizon h=8 quarters, while the comparable normal-regime multiplier is below 0.7.

zlb_state_dependent_multiplier_pk_framinginferred

viamonetary.monetary_expansion_directionfiscal.spending_levelfiscal.transfer_expansion

INCONCLUSIVE_DATA_PENDING — no treatment variable loaded; missing: ['oecd:NAQ_government_consumption', 'manual: Ramey-Zubairy military news shocks; Guajardo-Lei…

run pending

Post-2008 large-scale asset purchase programmes by the Federal Reserve, ECB, Bank of England, and Bank of Japan produced a measurable divergence between asset-price inflation (equities and residential real estate) and headline consumer-price inflation until roughly 2021.

qe_asset_inflation_vs_cpi_divergence_post_2008inferred

viamonetary.monetary_expansion_directionfiscal.spending_levelfiscal.transfer_expansion

refuted — Only 2 of 8 countries had even a 0.10 log-point asset-vs-CPI gap by 2020 (mean GAP_2020 = -0.02). The post-2008 divergence story does not survive a pa…

refuted

Large welfare states sustain long-run real GDP per capita growth when paired with market flexibility (low product- and labour-market barriers), trade openness, and fiscal discipline (debt-to-GDP below 90%), but not when paired with rigid product and labour markets, in an OECD and rich- country panel 1980-2020.

welfare_state_market_flexibility_complementinferred

viafiscal.spending_levelfiscal.transfer_expansion

PARTIAL — coef=+3.308e-18, p=0.653; effect magnitude effectively zero

partial

Large-scale universal or near-universal transfer programmes produce a three-order causal chain.

universal_transfer_programmes_labour_force_participation_declineinferred

viafiscal.transfer_expansionfiscal.spending_level

partial — Prime-age LFP fell by ≥1.0pp in 2/5 cases (threshold for SUPPORTED: ≥3). First-order improved in 3/4 cases. Mixed: consistent with the spec's design-d…

partial

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

Milei Shock Therapy — Argentina December 2023 onward

ARG·2023

match

2.3

spending leveltransfer expansionmonetary expansion direction

IMF Stand-By Arrangement (Jun 2018, expanded Sep 2018)

ARG·2018

match

1.9

spending levelmonetary expansion directiontransfer expansion

EU/IMF/World Bank stand-by arrangement and Bajnai adjustment package (Hungary, 2008-2010)

HUN·2008