Peruvian miracle: good luck or good policies?

Produced by: 
Pontificia Universidad Católica del Perú
Available from: 
December 2013
Paper author(s): 
Waldo Mendoza (Departamento de Economía de la PUC del Perú)
Topic: 
Macroeconomics - Economic growth - Monetary Policy
Year: 
2013

The Peruvian economy has had an extraordinary performance in the last 10 years. The 2012 per capita GDP is 66 percent over 2002 and more than double its 1992 level. In a long term perspective, the cumulative growth of GDP per capita recorded in the last 10 years has been the strongest since 1900. This is the "Peruvian miracle". This paper aims to find the determinants of Peruvian miracle. In theory, countries' macroeconomic performance can be determined by two factors: i) the “good (bad) luck effect” that is related to the international context, which can be favorable or unfavorable, and ii) the “good (bad) policies effects", associated with short-term macroeconomic policies or structural reforms, which are policies that alter the current development model. The hypothesis of this work is that the Peruvian miracle of the last 10 years has much to do with good luck and, in part, with good short-term macroeconomic policies.

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