Policy-Driven Productivity in Chile and Mexico in the 1980s and 1990s / Raphael Bergoeing, Patrick J. Kehoe, Timothy J. Kehoe, Raimundo Soto.

Format:

Book

Author/Creator:

Bergoeing, Raphael.

Contributor:

National Bureau of Economic Research.

Kehoe, Patrick J.

Kehoe, Timothy J.

Soto, Raimundo.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8892.

NBER working paper series no. w8892

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

Both Chile and Mexico experienced severe economic crises in the early 1980s, but Chile recovered much faster than did Mexico. Using growth accounting and a calibrated dynamic general equilibrium model, we conclude that the crucial determinant of this difference between the two countries was the faster productivity growth in Chile, rather than higher investment or employment. Our hypothesis is that this difference in productivity was driven by earlier policy reforms in Chile, the most crucial of which were in banking and bankruptcy procedures. We propose a theoretical framework in which government policy affects both the allocation of resources and the composition of firms.

Notes:

Print version record

April 2002.