Allende, Pinochet, and the stock market

We document the impact of Allende’s election and subsequent coup on share prices.

A rare natural experiment to identify impacts of institutions on economic outcomes.

The unexpected socialist victory in 1970 reduced share prices by one half.

The 1973 coup launching a business-friendly dictatorship raised share prices by 80%.

These effects reflect Allende’s systemic challenge to private property rights.

That is from Daniele Girardi and Samuel Bowles, here is an ungated version.