IDEAS home Printed from https://ideas.repec.org/p/chb/bcchwp/174.html
   My bibliography  Save this paper

Productivity and Economic Growth: the Case of Chile

Author

Listed:
  • Harald Beyer B.
  • Rodrigo Vergara M.

Abstract

After a decade and a half of economic growth above 7% per year, the Chilean economy has been growing at rates below 3% during the last five years. In this article we suggest that in order to produce a new surge in economic growth, Chile needs a productivity shock arising from economic policy initiatives aimed at improving economic efficiency and institutions. Although Chile has a good record in both, it is still possible to have an upgrade. We run a cross section regression in which the dependent variable is total factor productivity. We conclude that modest changes in the country’s policies and institutions may increase Chile’s rate of growth in 1.5 percent points.

Suggested Citation

  • Harald Beyer B. & Rodrigo Vergara M., 2002. "Productivity and Economic Growth: the Case of Chile," Working Papers Central Bank of Chile 174, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:174
    as

    Download full text from publisher

    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_174.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
    3. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    4. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    5. Jong–Wha Lee & Robert J. Barro, 2001. "Schooling Quality in a Cross–Section of Countries," Economica, London School of Economics and Political Science, vol. 68(272), pages 465-488, November.
    6. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    7. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    8. Dale W. Jorgenson & Zvi Griliches, 1971. "Divisia Index Numbers And Productivity Measurement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 17(2), pages 227-229, June.
    9. William Easterly & Ross Levine, 2002. "It´s Not Factor Accumulation: Stylized Facts and Growth Models," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.),Economic Growth: Sources, Trends, and Cycles, edition 1, volume 6, chapter 3, pages 061-114, Central Bank of Chile.
    10. Jorgenson, Dale W & Griliches, Zvi, 1971. "Divisia Index Numbers and Productivity Measurement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 17(2), pages 227-229, June.
    11. Sylvester C.W. Eijffinger, 2003. "The federal design of a central bank in a monetary union: The case of the European system of central banks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 365-380.
    12. Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
    13. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    14. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    15. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    16. Solange Berstein, 2002. "Two-Part Tariff Competition With Switching Costs and Sales Agents," Working Papers Central Bank of Chile 162, Central Bank of Chile.
    17. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    18. Jose De Gregorio, 2002. "Macroeconomic Management in Emerging Economies and the International Financial Architecture," Working Papers Central Bank of Chile 163, Central Bank of Chile.
    19. Easterly, William, 1993. "How much do distortions affect growth?," Journal of Monetary Economics, Elsevier, vol. 32(2), pages 187-212, November.
    20. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    21. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    22. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roberto Álvarez & Rodrigo Fuentes, 2004. "Patterns of Specialization and Economic Growth in Chile by Sector," Working Papers Central Bank of Chile 288, Central Bank of Chile.
    2. Rodrigo A. Cerda & José Tomás Valente, 2022. "The role of capital taxation on the business cycle: the case of Chile, 1960–2019," Economic Change and Restructuring, Springer, vol. 55(1), pages 83-108, February.
    3. Cristián Larroulet Vignau, 2003. "Public policies and national dvelopment," Past Working Papers 30, Universidad del Desarrollo, School of Business and Economics.
    4. Cristián Larroulet Vignau, 2016. "George Stigler and His Influence on the Transformation of the Chilean Economy," Serie Working Papers 44, Universidad del Desarrollo, School of Business and Economics.
    5. Rómulo A. Chumacero, 2002. "Is There Enough Evidence Against Absolute Convergence?," Working Papers Central Bank of Chile 176, Central Bank of Chile.
    6. World Bank, 2004. "Chile : New Economy Study, Volume 1. Executive Summary and Policy Recommendations," World Bank Publications - Reports 14710, The World Bank Group.
    7. Verónica Mies & Rodrigo Fuentes, 2005. "Mirando el Desarrollo Económico de Chile: Una Comparación Internacional," Documentos de Trabajo 287, Instituto de Economia. Pontificia Universidad Católica de Chile..
    8. Claudia De la Huerta & Javier Garcia-Cicco, 2016. "Commodity Prices, Growth and Productivity: a Sectoral View," Working Papers Central Bank of Chile 777, Central Bank of Chile.
    9. Francisco Rosende R., 2002. "El Desafío del Crecimiento Económico en Chile," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(1), pages 83-88, April.
    10. Klaus Schmidt-Hebbel, 2006. "Chile's Economic Growth," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 43(127), pages 5-48.
    11. Jorge Marshall R., 2002. "El Camino de las Reformas," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(1), pages 77-82, April.
    12. Andrea Tokman R, 2005. "Diagnosis and Proposals for Chilean Education," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 8(1), pages 35-52, April.
    13. Rodrigo Vergara, 2005. "Productividad en Chile: Determinantes y Desempeño," Documentos de Trabajo 296, Instituto de Economia. Pontificia Universidad Católica de Chile..
    14. Juan Rodrigo Fuentes S. & Gonzalo García, 2014. "A Disaggregate Look at Deteriorating Productivity in Chile: Has There Been Structural Change?," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 17(1), pages 04-36, April.
    15. Claudio Candia & Medardo Aguirre & Natalia Correa & María J. Herrera, 2016. "La productividad total de factores en el sector manufacturero chileno," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(35), pages 229-255, July-Dece.
    16. J. Rodrigo Fuentes, 2011. "Una Mirada Desagregada del Deterioro de la Productividad en Chile: ¿Existe un Cambio Estructural?," Documentos de Trabajo 401, Instituto de Economia. Pontificia Universidad Católica de Chile..
    17. J. Rodrigo Fuentes S. & Verónica Mies M., 2005. "Looking at Chile’s Economic Dvelopment From an International Perspective," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 8(1), pages 7-33, April.
    18. Rodrigo Vergara & Rosario Rivero, 2006. "Productividad Sectorial en Chile: 1986-2001," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 43(127), pages 143-168.
    19. Nganou, Jean-Pascal & Kebede, Ephraim, 2012. "Sources of Growth in Post-Conflict Burundi: From Destruction to Production," MPRA Paper 43577, University Library of Munich, Germany.
    20. Jose De Gregorio, 2004. "Economic Growth in Chile: Evidence, Sources and Prospects," Working Papers Central Bank of Chile 298, Central Bank of Chile.
    21. Carlos Massad A., 2002. "A Challenges of Economic Growth: an Overview," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(1), pages 5-10, April.
    22. Rodrigo Fuentes & Mauricio Larraín & Klaus Schmidt-Hebbel, 2004. "Sources of Economic Growth and Total Factor Productivity in Chile," Working Papers Central Bank of Chile 287, Central Bank of Chile.
    23. Andrea Tokman, 2004. "Education and Economic Growth in Chile," Working Papers Central Bank of Chile 289, Central Bank of Chile.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert W. Arnold, 2003. "Modeling Long-Run Economic Growth: Technical Paper 2003-04," Working Papers 14497, Congressional Budget Office.
    2. Mark Rogers, 2003. "A Survey of Economic Growth," The Economic Record, The Economic Society of Australia, vol. 79(244), pages 112-135, March.
    3. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    4. Steve Dowrick, 2003. "Ideas and Education: Level or Growth Effects?," NBER Working Papers 9709, National Bureau of Economic Research, Inc.
    5. Amavilah, Voxi Heinrich, 2014. "Knowledge = Technology + Human Capital and the Lucas and Romer Production Functions," MPRA Paper 58847, University Library of Munich, Germany.
    6. Måns Söderbom & Francis Teal, 2003. "Openness and human capital as sources of productivity growth: An empirical investigation," CSAE Working Paper Series 2003-06, Centre for the Study of African Economies, University of Oxford.
    7. Middendorf Torge, 2006. "Human Capital and Economic Growth in OECD Countries," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(6), pages 670-686, December.
    8. Antonio Ciccone & Elias Papaioannou, 2009. "Human Capital, the Structure of Production, and Growth," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 66-82, February.
    9. Ilkhom SHARIPOV, 2016. "ECONOMIC GROWTH IN THE EU’S EaP COUNTRIES: DETERMINANTS AND PROSPECTS," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 169-187.
    10. Norman Gemmell, 2001. "Fiscal Policy in a Growth Framework," WIDER Working Paper Series DP2001-84, World Institute for Development Economic Research (UNU-WIDER).
    11. Aribah Aslam, 2020. "The hotly debate of human capital and economic growth: why institutions may matter?," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(4), pages 1351-1362, August.
    12. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    13. Ulaşan, Bülent, 2012. "Cross-country growth empirics and model uncertainty: An overview," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-69.
    14. Zaiter Lahimer, Mahjouba, 2011. "L’impact des entrées de capitaux privés sur la croissance économique dans les pays en développement," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/7670 edited by Sterdyniak, Henri.
    15. Eliana Baici & Giorgia Casalone, 2005. "Has human capital accounted for regional economic growth in Italy? A panel analysis on the 1980-2001 period," ERSA conference papers ersa05p251, European Regional Science Association.
    16. repec:eee:labchp:v:3:y:1999:i:pc:p:2943-2984 is not listed on IDEAS
    17. John Ssozi & Simplice A. Asongu, 2016. "The Comparative Economics of Catch-up in Output per Worker, Total Factor Productivity and Technological Gain in Sub-Saharan Africa," African Development Review, African Development Bank, vol. 28(2), pages 215-228, June.
    18. Claude Diebolt, 2006. "Croissance et éducation," Working Papers 06-10, Association Française de Cliométrie (AFC).
    19. Fagerberg, Jan & Srholec, Martin, 2008. "National innovation systems, capabilities and economic development," Research Policy, Elsevier, vol. 37(9), pages 1417-1435, October.
    20. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, July.
    21. Ho, Chi Pui, 2016. "Industrious Selection: Explaining Five Revolutions and Two Divergences in Eurasian Economic History within a Unified Growth Framework," MPRA Paper 73862, University Library of Munich, Germany.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chb:bcchwp:174. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alvaro Castillo (email available below). General contact details of provider: https://edirc.repec.org/data/bccgvcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.