La Misión Klein-Saks, los Chicago Boys y la Política Económica

President Carlos Ibáñez del Campo came into power in 1952 to restore price stability and to end corruption. Soon, however, inflation was running at about 80 per cent per year and government invited Klein-Saks, the prestigious U.S. based consulting firm, to design and implement an anti-inflationary program. The Klein-Saks mission, after some initial studies, concluded that major economic structural reforms were necessary to bring inflation under control and to increase the rate of economic growth. Government accepted the proposed package and reforms were initiated. However, about a year and a half later, broad political opposition to these reforms induced government to cancel the contract with Klein-Saks, in spite of the fact that inflation had been drastically reduced. Soon the reform process was also abandoned and in some areas, even reversed. Decades after the Klein-Saks attempt and starting in late 1973, when inflation run at about 500 per cent and GDP was falling, were the military able to implement –this time under the guidance of the Chicago Boys- a coherent market system in Chile, not too different from that envisioned by Klein-Saks in the mid 1950´s. Good luck, political liberalization, and the economic institutions created under the military are today credited with the relatively high economic growth rates and price stability of Chile. This paper (a) compares the economic reform packages of the Ibáñez (Klein-Saks) and Pinochet (Chicago Boys) administrations, to identify main similarities and differences between those two programs; (b) carries-out a counterfactual exercise to quantify welfare cost of not having implemented the Klein-Saks program in the mid fifties; and (c) attempts to explain the political economy of the reforms in one and the other case.Economic history, Chile, anti-inflationary program, Klein-Saks mission, Chicago Boys

Understanding Development in Chile: Are the 1930s a Turning Point? - Introduction

Great depression, defining moment hypothesis, institutional change

End of the line: Relative Price Variability and Inflation in a Fixed Price Regime

We study the relation between inflation rate and relative price variability using data of prices on 23 disaggregated food items since 1960 to 2003 in Chile. The behavior of inflation rate is quite variable in that country during that time span and more interestingly, there are periods of time in which prices were determined (fixed) by the economic authorities. We find consistent evidence that a larger inflation rate causes a larger relative price variability and this effect is much larger in periods in which prices were fixed. We interpret that result as firms over-reacting to inflation when setting their relative prices if they assume that it is unlikely to reset their prices in the near future. That result holds even if we follow different econometric approaches and it holds for all the food products considered.Inflation, price dispersions

Sistemas Económicos, Tecnología y Acción Oficial en Defensa de la Libre Competencia: Chile 1810-2010

Este artículo hará un breve recuento histórico del tema de la protección a la libre competencia a nivel internacional y de la lógica de la acción pública para asegurar la libre competencia, para luego centrarse en la experiencia histórica de Chile, que en estricto rigor data en el mejor de todos los casos sólo desde 1959. La tesis es que en un país pequeño como el nuestro la apertura comercial es la política más efectiva para asegurar la libre competencia, sin perjuicio que acciones legales específicas como aquellas que prevé la actual institucionalidad a favor del libre comercio son un complemento indispensable de la política comercial.Economic history, economic regulation, Chile