TY  - JOUR
AU  - Bergoeing,Raphael
AU  - Kehoe,Patrick J.
AU  - Kehoe,Timothy J.
AU  - Soto,Raimundo
TI  - Policy-Driven Productivity in Chile and Mexico in the 1980s and 1990s
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8892
PY  - 2002
Y2  - April 2002
UR  - http://www.nber.org/papers/w8892
L1  - http://www.nber.org/papers/w8892.pdf
N1  - Author contact info:
Raphael Bergoeing
Diagonal Paraguay 257 - of. 1505
Santiago
CHILE
E-Mail: rbergoeing@fen.uchile.cl

Patrick Kehoe
Research Department
Federal Reserve Bank of Minneapolis
90 Hennepin Avenue
Minneapolis, MN  55480-0291
Tel: 612/204-5525
Fax: 612/204-5515
E-Mail: pkehoe@res.mpls.frb.fed.us

Timothy J. Kehoe
University of Minnesota
Department of Economics
1925 Fourth Street South
Minneapolis, MN 55455-0462
Tel: 612/625-1589
Fax: 612/204-5515
E-Mail: tkehoe@umn.edu
AB  - 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.
ER  -