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Productive development policy for Chile: an alternative to stagnation

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  • Agosin, Manuel R.

Abstract

Since 1998, Chile has been experiencing a significant slowdown in its economic growth. The Chilean economy’s recent poor performance is attributable to a halt in productive and export diversification around the beginning of the twenty-first century. State interventions have been horizontal, eschewing those to support specific industries. Intermediate interventions have focused on promoting activities (such as new exports and technologies) that form only a small part of the Chilean economy, leaving a wide margin for market forces to select companies and sectors. In terms of vertical policies, support for green hydrogen is proposed, as this is an emerging industry in which Chile has clear comparative advantages. The article also argues for exchange rate policies that mitigate sharp fluctuations in the real exchange rate and ensure a stable and competitive exchange rate for new exporters.

Suggested Citation

  • Agosin, Manuel R., 2023. "Productive development policy for Chile: an alternative to stagnation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    • Handle: RePEc:ecr:col070:48972
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    References listed on IDEAS

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    1. Reda Cherif & Fuad Hasanov, 2019. "The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy," IMF Working Papers 2019/074, International Monetary Fund.
    2. Agosin, Manuel R. & Díaz, Juan D. & Karnani, Mohit, 2019. "Sudden stops of capital flows: Do foreign assets behave differently from foreign liabilities?," Journal of International Money and Finance, Elsevier, vol. 96(C), pages 28-36.
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    5. Manuel Agosin & Cristian Larraín & Nicolás Grau, 2009. "Industrial policy in Chile," Working Papers wp294, University of Chile, Department of Economics.
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    12. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
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    15. Agosin, Manuel & Retamal, Yerko, 2021. "A model of diversification and growth in open developing economies," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 455-470.
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