Entrepreneurial Spin-Offs as a Structural Mechanism to Mitigate the Sacrifice Ratio in Open Economies

Abstract

In open emerging economies heavily dependent on imports, the fight against inflation often confronts a major structural obstacle: a high "Sacrifice Ratio." This concept is characterized by an exorbitant cost in terms of lost output and unemployment for every percentage point of disinflation. Standard restrictive monetary policies appear insufficient to counter imported inflation (Exchange Rate Pass-through) when local production is rigid or absent. Addressing this deadlock, this article proposes a novel theoretical cross-analysis between macroeconomic price dynamics and contemporary entrepreneurship theories, specifically regarding spin-offs. By synthesizing recent literature on business dynamism (Akcigit, 2021) and price transmission (Amiti et al., 2019), we argue that spin-offs act as a catalyst for technical progress and productivity. By transforming the production function through innovation and skills transfer, they reduce long-run unit costs and immunize the economy against exchange rate volatility. The article theoretically posits that an active spin-off policy in key sectors constitutes a "positive structural supply shock" capable of mechanically lowering the sacrifice ratio.