The Economic and Social Stabilization Fund (ESSF) is a state-owned fund in Chile aimed at stabilizing the finances of the Central Government in face of potential "abrupt changes in the

economic cycle Business cycles are intervals of general Economic expansion, expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general po ...

and extraordinary events". It was created in 2007 by the merger of the former Copper Stabilization Fund (Spanish: ''Fondo de Compensación para los ingresos del Cobre'') and of the stabilization resources created by Decreto Ley N° 3.653 of 1981. The fund is also used yearly to

amortize Amortization or amortisation may refer to: * The process by which loan principal decreases over the life of an amortizing loan * Amortization (accounting), the expensing of acquisition cost minus the residual value of intangible assets in a system ...

part of the public debt and to add to the Pension Reserve Fund. The fund is subject to the Fiscal Responsibility Law. The Copper Stabilization Fund was created in 1987 basing it on the incomes of the state-owned copper mining company

Codelco The National Copper Corporation of Chile (), abbreviated as Codelco, is a Chilean state-owned mining company and the largest copper mining company in the world. It was formed in 1976 from foreign-owned copper companies that were nationalised in 1 ...

. This allowed for more precise annual government budget planning given that

copper prices Metal prices are the prices of metal as a commodity that are traded in bulk at a predefined purity or grade. Metal can be split into three major categories, precious metals, industrial metals and other metals. Iron ore Precious metals and indust ...

can exhibit strong fluctuations.

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* {{cite book , last=Ceballos , first=Juan Ignacio , last2=Tilton, first2=John , date=2005, chapter=Análisis del Fondo de Compensación del Cobre Chile , title=Minería y desarrollo , editor-last=Lagos , editor-first=Gustavo, editor-link=Gustavo Lagos , language=es , location=Santiago, Chile , publisher= Ediciones Universidad Católica de Chile , pages=295–318 , isbn=956-14-0844-9 2007 establishments in Chile 2007 in politics 2007 in economic history Sovereign wealth funds Government of Chile Copper mining in Chile Codelco

See also

References

Bibliography