Assessing the Macroeconomic Impact of Structural Reforms in Chile

Author/Editor:

Metodij Hadzi-Vaskov

Publication Date:

December 14, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This study investigates the likely macroeconomic impact of various structural reforms that align the Chilean regulatory framework with international best practices. In this context, the analysis: i) presents a comparison across a large set of structural indicators; ii) identifies policy gaps with respect to OECD countries; and iii) provides quantification of the likely growth and fiscal impact of policy reforms needed to close the gaps. Chile’s economy is likely to benefit from streamlining business regulation and licensing, strengthening innovation and R&D capacity, improving labor market flexibility, and enhancing active labor market policies. Overall, the study presents a scenario in which Chile closes structural gaps with OECD’s 25th percentile over five years, with up to 6 percent higher output level and a cumulative net fiscal gain of about ½ percent of GDP.

Series:

Working Paper No. 18/285

Subject:

English

Publication Date:

December 14, 2018

ISBN/ISSN:

9781484386934/1018-5941

Stock No:

WPIEA2018285

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

25

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