Nobel Winner Merton, Sachs to Advise Chile on Economic Development Goals

Nobel laureate Robert Merton and Columbia University professor Jeffrey Sachs will advise Chile’s government on meeting the country’s economic development goals, Finance Minister Felipe Larrain said today.

The economists, who also include Harvard University professor Edward Glaeser and Boston University professor Laurence Kotlikoff, are scheduled to meet with Larrain and President Sebastian Pinera today and tomorrow and will be invited back on an annual basis, the minister told reporters at the presidential palace in Santiago.

Pinera, who started his four-year term in March, has promised to eradicate extreme poverty during his administration and position the economy to increase average income per capita to as much as $22,000 from the existing $14,000 by 2020. Chile’s goals can be reached as the economy withstood the 2008 financial crisis and the February earthquake, said Merton, winner of the 1997 Nobel Prize in economics.

“It’s a challenge, it truly is, but it can be achievable,” Merton told reporters at the palace. Merton said the government may consider using resources to protect the economy against future “shocks to the system, whether they be in the commodities areas or things outside the control of the government.”

Chile’s economy may expand by as much as 5.5 percent this year, the most in five years, the central bank said in its latest monetary policy report. Chile’s government, which next week plans to publish its 2011 budget proposal, wants public spending to grow at a slower pace than the economy, Larrain said today.

The government may increase spending by about 5 percent next year, Santiago-based newspaper El Mercurio reported today without saying where it got the information.

To contact the reporter on this story: Randy Woods in Santiago at rwoods13@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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