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Andres Velasco

Andres Velasco

Papá orgulloso de Rosa, Ema y Gaspar y feliz marido de @consuelosaav. Embajador @Hay_Mujeres

Articles by Andres Velasco

How to Get by Without Russian Gas

26 days ago

Andrés Velasco, a former presidential candidate and finance minister of Chile, is Dean of the School of Public Policy at the London School of Economics and Political Science. He is the author of numerous books and papers on international economics and development, and has served on the faculty at Harvard, Columbia, and New York Universities.

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Democracy Is the Next Identity Politics

March 25, 2022

Andrés Velasco, a former presidential candidate and finance minister of Chile, is Dean of the School of Public Policy at the London School of Economics and Political Science. He is the author of numerous books and papers on international economics and development, and has served on the faculty at Harvard, Columbia, and New York Universities.

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Argentina’s Imaginary Miracle

January 21, 2022

Andrés Velasco, a former presidential candidate and finance minister of Chile, is Dean of the School of Public Policy at the London School of Economics and Political Science. He is the author of numerous books and papers on international economics and development, and has served on the faculty at Harvard, Columbia, and New York Universities.

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The Political Center Does Have Meaning

December 28, 2021

Centrist politicians accept some ideas from the left and some from the right, making it all too easy to dismiss them as unprincipled cynics. But not only can centrism represent a distinct set of ideas; it is also necessary for protecting democracy against populist authoritarianism.

SANTIAGO – Can the political center hold any meaning? That question has gained new urgency as politics becomes more polarized in the United States, Chile, the Philippines, India, and many other countries.
What the US Misunderstands About Russia

Peter Klaunzer/Pool/Keystone via Getty Images

PS Commentators’ Predictions for 2022

PS OnPoint

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Why Has Chile Embraced the Extremes?

December 1, 2021

Many Chileans are frightened, and others are angry – not least because of the COVID-19 pandemic and the ensuing economic squeeze. But the political failures of the center-left also help to explain why the far right and the far left will contest the second round of the country’s presidential election.

LONDON – When candidates from the far right and the far left advance to the second round of a presidential election, one is tempted to quote William Butler Yeats’s famous line, “things fall apart; the center cannot hold.” But to understand Chile’s current presidential contest, Vladimir Lenin, who called left-wing communism “an infantile disorder,” is a better guide.
Buckling Up for Omicron

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Latin America’s Monster Movie

November 1, 2021

Latin America has long suffered from left-wing populism, and now it is plagued by right-wing populism. Several upcoming elections will likely pit a right-wing King Kong against a left-wing Godzilla, promising to leave only destruction in their wake.

SANTIAGO – Latin Americans have many talents. One is a remarkable ability to misgovern ourselves, as the pandemic has made clear. Six of the 20 countries with the most COVID-19 deaths per capita in the world are in Latin America. Peru tops the list. Brazil is eighth.
The Subordination of Women in Texas

Jordan Vonderhaar/Getty Images

The Bonfire of the Currencies?

PS

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Nation-Building 101

September 30, 2021

Nation-building boils down to “expanding the circle” of moral concern. That is why successful nation-states – large or small, rich or poor – have one thing in common: citizens’ sense of a shared past and future.

LONDON – In the aftermath of the Afghanistan debacle, some claim that Western forces might have succeeded had they just come out of the bunker and engaged more with local groups. Others claim that, in the absence of the civic habits and culture of cooperation required by a functioning state, all efforts at nation-building in places like Afghanistan are destined to fail. Both positions are misleading, if not mistaken.
China’s Risky Business Crackdown

Qilai Shen/In

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Preventing a Stablecoin Liquidity Crisis

August 2, 2021

There is no sound argument for applying lender-of-last-resort protection to privately issued cryptocurrencies. But regulators can prevent the all-too-predictable liquidity squeeze caused by a run on stablecoins – including by regulating them out of existence if necessary.

LONDON – Liquidity is to the modern economy what lubricant is to a car engine. Provide enough of it, and things run smoothly; come up short, and the result is a red-hot, smoke-spewing mess. But whereas lubricating oil is easy to gauge, financial liquidity is here today and gone tomorrow. A financial crisis is always around the corner, and the next one could result from the rapid rise of cryptocurrencies – and especially so-called stablecoins.

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The Perils of Paradigm Economics

July 5, 2021

As the world seeks to recover from the COVID-19 crisis, simplistic political and economic ideologies that serve as identity markers will not lead to effective policymaking. But something in human psychology makes many crave them nonetheless.

LONDON – “The era of big government is over,” then-US President Bill Clinton proclaimed in 1996. But President Joe Biden’s multi-trillion-dollar spending plans are suggesting precisely the opposite. Behind the politicians stand the policy gurus, eager to put their names on – as the fashionable phrase goes – a new “policy paradigm.”
Under the Latin American Volcano

Nelson Almeida/AFP via Getty Images

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Chile’s Constitutional Revolution

May 31, 2021

The 155 members of Chile’s new constitutional convention must cast aside everything they stand for in order to do their job well. A generation reared on direct participatory politics – whether via Twitter, on university campuses, or in the streets – now must build a representative democracy

LONDON – A revolution is the overthrow of existing political arrangements. A successful uprising builds new and better ones. There have been many revolutions in Latin America, but few have succeeded. Can Chile buck that age-old trend?

America, Human Rights, and Israel’s War on Palestine

EMMANUEL DUNAND/AFP via Getty Images

Europe’s Digital Future

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Twisted Democracies

May 3, 2021

In many democracies, particularly in Latin America, well-meaning reforms intended to enhance democracy have achieved just the opposite, with governments that are strong on paper but weak in practice. And with each election cycle, citizen rage is brought ever-closer to the boiling point.

LONDON – Pedro Castillo is an authoritarian left-wing populist without the charm or charisma of most populists. Keiko Fujimori is a recently incarcerated right-wing populist, the daughter of a former dictator who is serving a 25-year sentence for murder, kidnapping, and corruption. Together, Castillo and Fujimori received fewer than one in three votes in the recent first round of Peru’s presidential election. Yet one of them will be the next

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Evolution, Not Revolution, in Economics

February 26, 2021

A growing acceptance of aggressive fiscal policy is supposed to be the first principle of a new, post-revolutionary regime in macroeconomics. But the only genuine conceptual change in the decade since the global financial crisis has come from efforts to explain when and why "unconventional" monetary policy works.

LONDON – While they stare quietly at their models, macroeconomists are hearing the distant rumble of revolt. A year ago, the Nobel laureate economist Joseph Stiglitz announced that capitalism was undergoing “yet another existential crisis,” with “neoliberal ideology” to blame. Now Robert Skidelsky has proclaimed the arrival of a “silent revolution in macroeconomics.” Martin Sandbu of the Financial

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The COVID Tsunami and Emerging Markets

February 2, 2021

No one is sure why poorer countries have suffered proportionally fewer infections and deaths during the pandemic: weaker health systems, worse nutrition, and larger numbers of people with pre-existing medical conditions suggested the opposite outcome. But the economic implications have been clear.

LONDON – A tsunami-watcher’s job is thankless. If an earthquake hits Australia, or an underwater volcano erupts near Java, naval stations in Japan, Vietnam, the Philippines, New Zealand, and even far-away Peru and Chile go on alert. Residents of coastal areas are warned that a big wave may be coming. Get it right, and tsunami-watchers save millions of lives; get it wrong, and they try to ignore the scorn, knowing that next

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Chile’s Great Pension Raid

December 14, 2020

Because the policies they produce are so ludicrous, populist cycles eventually crash against reality and come to an end. Sadly, for too many Chileans, the crash may come when they reach old age with no retirement savings.

LONDON – How should families pay for the costs of the pandemic? The conservative government’s finance minister proposes that the state should help. Thanks but no thanks, retort members of the country’s congress. Families can use their own accumulated pension savings, and the government should give them access to those funds.

Who Will Succeed Merkel?

Popow/ullstein bild via Getty Images

The Costs of Merkel’s

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Are We All Keynesians Again?

August 25, 2020

A common refrain nowadays is that after COVID-19, Milton Friedman is out and John Maynard Keynes is in. But if, as the famous quote often attributed to Richard Nixon puts it, “we are all Keynesians now,” we must remember what Keynes taught: fiscal policy should be tightened during good times, precisely so that it can be expansionary during bad times.

LONDON – Among the pieties repeated at every online COVID-19 conference, one is universally acknowledged: the pandemic has ushered in an era of larger, more robust state intervention in the economy. But what does this mean for the future? In what areas of economic life should and can the state do more?

Belarus’s Revolution of Dignity

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The Call of the Tribal

July 8, 2020

Democratic politics has long been premised on politicians and voters acting in accordance with their principles, their interests, or both. But these two models seem useless for explaining today’s politics – particularly when it comes to the US Republican Party and its voters.

LONDON – Why do politicians make the choices they do? And why do voters then choose to support them? One possible answer is that voters prefer politicians whose principles they share, and will re-elect lawmakers who promote those principles while in office. Another view holds that voters support politicians who defend their economic or other interests, and will vote them out if they fail to do so.

Understanding the

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Preventing an Emerging-Market Meltdown

June 9, 2020

Emerging markets today account for more than two-fifths of global GDP measured at market exchange rates, and nearly three-fifths after adjusting for differences in purchasing power. If these economies crash, then rich-country citizens will also be the victims of an economic catastrophe long foretold and clearly avoidable.

LONDON – In his novel Chronicle of a Death Foretold, Gabriel García Márquez describes a tragedy that everyone anticipates but no one will stop. The same is true of the perilous plight of emerging markets today: the international community could prevent imminent macroeconomic disaster, but seemingly lacks the will to do so.

A Sustainable Recovery Must Be More Than Green

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The Populists’ Pandemic

May 1, 2020

Because populist leaders of both the right and left have topped the ranks of incompetence during the pandemic, it has become common to claim that they will soon become its political victims. Alas, this may be wishful thinking.

LONDON – US President Donald Trump suggested that injecting them with household disinfectant might cure people of the coronavirus. Filipino President Rodrigo Duterte ordered police and military to shoot dead anyone “who creates trouble” during the stay-at-home period. And in Mexico, President Andrés Manuel López Obrador denied for weeks that the virus was a threat and continued to hug and shake hands with supporters, only to flip suddenly and impose a severe lockdown without warning.

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To Protect Democracy, Reform It

February 26, 2020

We vote every four or so years for candidates about whom we know little, in a process mediated by political parties, which are often less than fully democratic themselves. No wonder, then, that more than half of respondents in 27 countries say they are dissatisfied with democracy.

LONDON – Democracy may be “the worst form of Government except for all those other forms that have been tried from time to time,” as Winston Churchill famously said, but that does not mean democracy is good enough. Voters know it, and they are as mad as hell about it.
When China Sneezes

Xinhua/Zhang Ailin via Getty Images

The White Swans of

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In Defense of Cosmopolitanism

January 31, 2020

Nowadays, the word "cosmopolitan" conjures an image of jet-setting, latte-sipping elitists with little or no regard for their fellow citizens. In fact, cosmopolitans are idealists for whom love of country begins with a fundamental commitment to the equal dignity of all human beings.

LONDON – Cosmopolitanism gets plenty of bad press nowadays. “Cosmopolitan” is often paired with “elites,” as in the cosmopolitan elites who sip cappuccino in the morning and pinot noir at night, jet around to places like Davos, and enjoy big gains from the digital revolution.
What if Bernie Wins?

PS OnPoint

Ralph Freso/Getty Images

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PS Say More: Andrés Velasco

January 13, 2020

This week, Project Syndicate catches up with Andrés Velasco, a former finance minister of Chile who is now Dean of the School of Public Policy at the London School of Economics and Political Science.

Project Syndicate: As Chile’s former finance minister, what do you think of the government’s economic-recovery strategy, which includes plans to issue up to $8.7 billion of bonds next year – $3.3 billion in foreign currencies – to fund higher government spending? Are there lessons that other emerging economies can learn from the fact that Chile is able to pursue such a strategy at a time of social upheaval?Andrés Velasco: Since 2000, Chile has maintained rigorous fiscal discipline. By saving in good times, the government has made it

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Was Marx Right?

December 26, 2019

Karl Marx and Friedrich Engels did not claim only that capitalist development engenders its own contradictions, but also that those contradictions could be overcome only through the “forcible overthrow of all existing social conditions.” It is up to governments to carry out – and soon – the reforms needed to prove Marx and Engels wrong.

SANTIAGO – In Santiago, Chile, a massive graffito by the exit ramp of a brand-new, privately-built urban freeway reads: “Marx was right!” Indeed, capitalist development begets its own contradictions, as the scribbling itself attests.
How Truth Survived 2019

Isaac Lawrence/AFP via Getty Images

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Bipolar Economics

November 28, 2019

Randomized controlled trials are the flavor of the month in development economics, with their keenest advocates having just been awarded the Nobel Prize. But can this experimental approach really be counted on to produce better economic policies?

LONDON – How can we know if an economic policy is achieving its stated objective? Well, we can create two similar groups, randomly allocate the “treatment” to only one of them and measure the results. By comparing the groups, we will obtain a reliable estimate of how effective the policy is.
The Patriot versus the President

Chip Somodevilla/Alex Wong/Getty Images

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Santiago Under Siege

October 28, 2019

SANTIAGO – At least 19 dead and untold wounded. A half-dozen subway stations attacked with firebombs. Hundreds of supermarkets vandalized and looted. The downtown headquarters of the country’s largest power distributor in flames. A city of nearly seven million people paralyzed. After a state of emergency is declared, army units patrol the streets and enforce a curfew.
The Silence of the Republican Lambs

Alex Wong/Getty Images

No Art to the US-China Trade Deal

Getty Images

Why Rich Cities Rebel

Pablo Rojas Madariaga/NurPhoto via Getty Images

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Argentina’s Recurring Nightmare

September 27, 2019

Argentine President Mauricio Macri seems almost certain to lose his country’s presidential election next month, after committing the same kinds of economic-policy mistakes that so many of his Peronist predecessors made. It is a tragic and catastrophically disappointing denouement.

LONDON – Argentina has done it again: inflation is up, growth is down, and the peso has lost two-thirds of its value. Depositors have been rushing to withdraw their money from local banks, and a debt default looms. While Argentines suffer the consequences, the world emits a collective sigh of disbelief: wasn’t this time supposed to be different?
The Constitution Won’t Save American Democracy

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Saving Venezuela

August 27, 2019

Venezuela was once the pride and democratic example of Latin America. It can be that once again: a free, stable, and productive country, where citizens live in safety and peace – but only if the international community provides support in at least three key areas.

SANTIAGO – Venezuela remains in free fall. Home to the world’s largest proven oil reserves and once Latin America’s wealthiest country, it is now ravaged and suffering complete economic collapse. GDP has fallen 54% from its 2013 peak, the second largest drop recorded in modern history, according to the Institute for International Finance.
The Unsustainability of Inequality

PS OnPoint

Richard

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Will Facebook’s Libra Turn into a Cancer?

July 16, 2019

Facebook’s planned cyber currency, Libra, is little more than a glorified currency board – the failed arrangement that in 2001 caused the largest sovereign default the world had ever seen. A major risk is devaluation – and the problems don’t stop there.

LONDON – When it announced its plans to launch a cyber currency, Facebook emphasized that its Libra will benefit “people with less money [who] pay more for financial services,” especially in developing countries. But when one compares Facebook’s current blueprint to those same countries’ experience, Libra starts to look like a hazard.
Philanthropy vs. Democracy

PS OnPoint

Michael Orso/Getty Images

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The Experts We Need

June 19, 2019

Policy gurus spend too much time with others like them – top civil servants, high-flying journalists, successful businesspeople – and too little time with ordinary voters. If they could become “humble, competent people on a level with dentists,” as John Maynard Keynes once suggested, voters might identify with them and find them trustworthy.

LONDON – In the midst of the debate on the most crucial decision the United Kingdom has faced in a generation, then-Minister of Justice Michael Gove exclaimed, “I think the people in this country have had enough of experts.” That statement received almost as much media attention as Gove’s recent admission that he has used cocaine.
Why

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The Experts We Need

June 19, 2019

Policy gurus spend too much time with others like them – top civil servants, high-flying journalists, successful businesspeople – and too little time with ordinary voters. If they could become “humble, competent people on a level with dentists,” as John Maynard Keynes once suggested, voters might identify with them and find them trustworthy.

LONDON – In the midst of the debate on the most crucial decision the United Kingdom has faced in a generation, then-Minister of Justice Michael Gove exclaimed, “I think the people in this country have had enough of experts.” That statement received almost as much media attention as Gove’s recent admission that he has used cocaine.

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Dirty Floating in Emerging Markets

May 13, 2019

Central banks are supposed to use the interest rate to achieve an inflation target and let the exchange rate float freely. So why do they often intervene in currency markets by buying and selling international reserves, and use a host of other measures to limit their currencies’ volatility?

LONDON – Say one thing and then do something else. That pretty much sums up current orthodoxy in emerging economies regarding exchange-rate management. Countries are supposed to use the interest rate to achieve an inflation target and let the exchange rate float freely. In practice, Asian and Latin American central banks often intervene in currency markets by buying and selling international reserves, and

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