Banco Central de ChileRevista Economía Chilena
Published Issues
Volume 4 Nº 3 December 2001
Articles available in PDF format. We suggest to use Adobe® Reader® 5.0 or higher.
| Articles |
|---|
| Structural budget balance: the pilar of the new chilean fiscal policy rule Mario Marcel C.; Marcelo Tokman R; Rodrigo Valdés P.; Paula Benavides S. This paper develops the structural budget balance methodology, adopted for use in the Chilean public sector. The structural balance methodology adjusts fiscal accounts so they reflect changes in net worth and makes it possible to isolate changes in fiscal policy resulting from the main exogenous factors determining fiscal revenues: GDP and copper price. This facilitates the analysis and evaluation of fiscal policy in Chile, which, since 2000, has focused on achieving a structural budget surplus, thus ensuring the existence of counter-cyclical fiscal policy in a framework of robust fiscal accounts. |
| Foreign Shocks and Monetary Policy Transmission in Chile Eric Parrado H. This paper considers empirical evidence for a small open economy, characterizing and identifying the dynamic effects of foreign and monetary policy shocks on Chilean macroeconomic variables. A structural VAR approach is used with non-recursive contemporaneous restrictions. The analysis provides several interesting results. First, consistent with the predictions of a stochastic rational-expectations model, a domestic monetary contraction generates a temporary reduction of output and monetary aggregates. Second, there is no evidence of price and exchange rate puzzles. Third, the source of Chilean output, price level, and real exchange rate volatility is similar to that identified in industrial countries; monetary policy explains a relatively small fraction of output, price level, and exchange-rate variability. Finally, foreign monetary policy innovations have short-lived effects on domestic interest rates and have no major influence over other Chilean macroeconomic variables. However, risk premium shocks influence significantly both the interest rate and the exchange rate. |
| Inflation Forecasting in Chile Francisco Nadal De Simone This study estimates two models of Chilean inflation with time-varying parameters during the sample period 1990-1999. The first model is based on the Phillips curve and the second represents a small open economy with an inflation-targeting framework. The out-of-sample inflation forecasts of the two models are compared with the out-of-sample inflation forecasts produced by simple time series models à la Box-Jenkins. The most important results are: inflation forecasts produced by models that include the official, pre-announced inflation target are better that those produced by models that do not include it; the Phillips curve model produces better out-of-sample forecasts than the small open economy model; although for the short run the simple Box-Jenkins models produce better out-of-sample forecasts than the Phillips curve model, their forecasting ability deteriorates rapidly in the medium term. In general, including Markov-switching in the two models does not help to explain a significant part of the conditional variance in the forecast error. It is important to stress, however, that as the monetary policy regime enters its steady state in 2001, the relative ranking of the inflation forecast models may change. |
| Research Notes |
| Déficit Previsional del Sector Público y Garantía de Pensión Mínima Herman Bennett C.; Klaus Schmidt-Hebbel |
| Encaje a los Depósitos: Argumentos Teóricos e Impacto en la Política de Liquidez de los Bancos Rodrigo Cifuentes S. |
| Books review |
| ¿Qué Hacer Ahora? Propuestas para el Desarrollo Editado por Harald Beyer y Rodrigo Vergara Rolf Lüders Sch. |
| Asset Pricing de John H. Cochrane J. Rodrigo Fuentes S. |
| Publications Review |
| Catastro de publicaciones recientes Resúmenes de artículos seleccionados |