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Pictures and information for closing remarks of
Dr. Vittorio Corbo:
Disclaimer: These notes below were taken by students
during the conference. Any misrepresentation of facts, omission or error of
interpretation is unintentional. They are intended to encapsulate the
presentations for conference attendees and do not represent the views of MIT
Sloan School of Management.
To download the presentation of this panel, press
here
Introduction by Dr.
Roberto Rigobon.
“There are two types of Central Bankers, one that can talk about Monetary Policy
and other that can talk about Monetary Policy and Soccer. Vittorio Corbo is the
second one”
Dr. Vittorio Corbo
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You can not grow a
30 meter tree in one day! You have to wait, you need consistency |
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The central bank
needs to ensure that field is leveled for a good soccer game. |
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Chile has been
Fiscally Responsible for over 25 Years, however it was closed to the world
with tariffs above 100%. |
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Now this has
changed dramatically, with two free trade agreements, one with Europe and one
with the U.S. |
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When Crisis comes,
you destroy the Financial Systems, you have to be prepared. |
Economic and Social
Performance off LAC Economies
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From 50’s
to 80’s L.A. grew on an average of 5% a year, then debt crisis interrupted
this growth. Crisis uncovered structural problems in LAC. |
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Poverty has grown a
lot, however in Chile went down substantially to 16% from 32% whereas Mexican
population below the poverty line grew from 20% to 21%. |
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Searching for explanations
Macro Crises have
damaged the results that could have been achieved with the many reforms that
have been undertaken in the whole region.
Reforms in Chile have
gone well beyond macro and trade emphasizing the institutional buildup; as a
result Chile is well prepared for problems. “Copper price was down; however
Chile did not face a crisis”
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The
breath of reforms in Chile
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Competition and
privatization |
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Pension System |
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But the most
important has been the institutional buildup (IP, Banking, Education,
Independent Central Bank, low corruption) |
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Challenges of Latin America
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There is a
tremendous advantage to have flexibility |
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A floating exchange
rate along with inflation target seems a good mix. A float requires a credible
nominal anchor |
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The opening process
has helped Chile enormously, having strong property rights. |
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Quote: “We have a
special machine in Chile, where we input Salmon on one side and get Computers
on the other….. this machine is called International Trade” |
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The Reforms need
more time to mature. |
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Final Remarks
The key are in the
institutions
Question from the
audience: What is the correlation of General Pinochet and the current Chilean
success? Corbo’s answer: We were lucky that there was an army of well trained
Economists, and Pinochet did not take the Country home. For some reason or
another, the Dictator believed in the economists, which was good, but let’s not
forget that many of the reforms are of the 90’s. The cost has already been paid
and this should benefit the future generations. The changes are already in our
blood.
We need to invest
specially in the Human Capital.
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Dr. Vittorio Corbo, another MIT Alumn who has done a tremendous service to his country
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Dr. Vittorio Corbo has been Central Banker of Chile since 2003
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Dr. Roberto Rigobon and Dr. Vittorio Corbo talking about the realities of Latin America from an Economist's perspective
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The auditorium was full of Latinos at 5 PM on a Saturday evening
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Lorenzo Mendoza stayed to ask great questions to Dr. Corbo
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Dr. Jamil Mahuad also stayed to pose great questions to Dr. Corbo
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