Determinants of economic growth: an example of Chile

Abstract

The aim of the article was to find the factors responsible for economic growth in Chile – a country whose effects of economic reforms are described as a “miracle”. In the first part of the paper, some of the growth models were analyzed, incl. the neoclassical model of economic growth by Solow or, quite extensively, the growth model proposed by   R.E. Lucas, which is a well‐known example of a model from the new theory of growth. The theoretical part has been included in order to determine the theoretical variables taken into account while considering by economists over the years. In the second part of the article, an empirical study was carried out on the basis of statistical material from the World Bank database – annual data from the period between years 1960 and 2019 were used. The variables concerning expenditure on research and development or foreign direct investments flowing to Chile turned out to be statistically significant. Finally, the analysis is summarized and the most important elements of the study are summarized in the form of short conclusions.