I’ve always been a huge fan of the Olympic Games. It’s my favorite sporting event—more so than the World Cup or any “world championship” final for a sport in North America. My unfulfilled dream is to compete in one, but at my age, I’d be lucky to even compete in skeet shooting—and believe me, practicing for it doesn’t keep me up at night (nothing personal).

Given that, I recall the opening ceremonies with particular joy—because of the massive mobilization of volunteers and the organization, and because they always highlight local cultural aspects of the host city. For example, at London 2012, both the opening and closing ceremonies focused on things that make the United Kingdom proud: the Industrial Revolution, rugby and soccer, the National Health Service (NHS), music, James Bond, and, of course, Mr. Bean.

That sense of national pride led me to wonder what things should make us Chileans proud. In a non-statistically representative survey, people mentioned the Teletón, our resilience in the face of disasters, our wine and pisco, the marraqueta, our national holidays, Neruda, Mistral, and Huidobro, Chino Ríos, the glorious University of Chile, Torres del Paine, and so on. It’s true that, in one way or another, all these things represent us and are part of “our DNA,” but I believe they unfairly leave out what is perhaps the institution that has done the most for our well-being and is constantly recognized internationally: the Central Bank.

It’s true that the Central Bank of Chile isn’t as famous as Alexis Sánchez, Marcelo Salas, or Bárbara Riveros, but without downplaying the efforts of our outstanding athletes, in the “Central Banks League,” you can count on one hand those who managed to reduce inflation and its volatility in such a short time.—with all the improvement in well-being that this entails, especially for the poorest. This was no easy feat and, as I wrote on one occasion, it required both economic and political efforts in a fractured society emerging from a dictatorship but in need of mutual understanding, agreements, and clear objectives. Thus, since the Central Bank achieved its autonomy, inflation fell from nearly 25% annually at the start of 1990 to just under 3% at the start of 2000. Since then, price changes have averaged what was previously the midpoint of the target range and is now the specific target of our inflation-targeting framework: 3%.

In fact, at a recent seminar on monetary policy and inflation—which I was fortunate enough to attend (well, via Zoom)—several speakers praised the way monetary policy is conducted in our country. One of them, a prominent economist from the Fed, even mentioned that the best monetary policy manual in the world was the one published by our Central Bank. There are few areas where we’re recognized as number one, and although the Central Bank may seem like an institution far removed from our daily lives, that’s probably the best indication that it’s doing its job—since inflation isn’t as significant an issue here as it is in other parts of the world. That is why, when some voices in the constitutional debate suggest that the Central Bank’s autonomy should be reviewed and that additional objectives should be added, we must be cautious. Let’s continue to refine what has been done so successfully thus far, but let’s not undermine one of the few things of which we can all feel tremendously proud across the board.

Nathan Pincheira

Chief Economist at Fynsa