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Andrés Velasco
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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 possible to spend in times of crisis, such as after the 2008 global financial crisis and during today’s mass – often violent – protests. Indeed, with today’s social upheaval and political uncertainty undermining growth, providing some fiscal stimulus is the right thing to do.

But two caveats are in order. First, if consumption and investment – and, thus, economic growth – are to recover, violence and looting must end. Second, accumulated savings can be used only to cover temporary fiscal shortfalls. If the government is planning to increase fiscal outlays permanently (as I believe it should), it will have to raise taxes.

Velasco recommends

We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Velasco's picks:

From the PS Archive

From 2017
Velasco defends political centrism as a coherent philosophy emphasizing liberty, patriotism, and openness. Read the commentary.

From 2018
Velasco calls for reforms that would permit developing countries to borrow from abroad without risking disaster. Read the commentary.

Around the web

In a 2019 interview, Velasco explores the state of democracy, immigration, trade wars, and the Indian economy. Read the discussion.

In a Spanish-language interview on CNN Chile, Velasco discusses populism in Chile and the world and affirms that the only group with the conceptual tools to defeat populism is the center. Watch the video.

https://prosyn.org/1jAXmAz