Chicago Boys: Economic Liberalization and the Chilean Economy

Abstract

A group of Chilean economists trained at the University of Chicago, known as the Chicago Boys, moved into Chilean policymaking positions in the late 1970s. They implemented widespread free market reforms. We quantify the causal impact of these policies on the Chilean economy by applying the Synthetic Control Method. This method generates a synthetic Chile, mirroring the macroeconomic and political characteristics of the actual country, albeit without the presence of the Chicago Boys. By 2019 we show that the Chilean GDP per capita is 4012 USD higher than it would have been had the reforms not been implemented.

Keywords: Chicago Boys, Chile, Neoliberal reforms, Synthetic Control Method

JEL Classification: E65; H50; N16