Banco Central de ChileRevista Economía Chilena
Published Issues
Volume 6 Nº 1 Abril 2003
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| ARTICLES |
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| Money and Inflation: Where do we Stand? Jose de Gregorio R. This article analyzes the rapid growth of money (M1A) in the Chilean economy, that has coincided with low inflation and a loosened monetary policy. This has been advocated to assert that such monetary growth is inconsistent with the inflation target. This work is intended to prove such an argument wrong. First, episodes occurred in other lower-inflation countries are presented, where monetary aggregates have grown even faster than in Chile, without resulting in higher inflation. Second, money trends are shown to be consistent with money demand estimates, although these are very volatile. Finally, the paper explains why in the context of a monetary policy based on inflation targeting, where the policy instrument is the interest rate, it is possible for money to fluctuate widely without jeopardizing the inflation target. Even if inflation is associated to an excessive increase in the amount of money, and monetary policy is neutral over the long term, monetary aggregates provide little information on inflationary pressures. |
| Money and Inflation in an Inflation-Tageting Regime Pablo García S. / Rodrigo Valdés P. This work describes the role of money in the current inflation-targeting framework in Chile, in particular given the large recent annual increase in M1A. From a conceptual standpoint, it analyzes the relationship between money growth and inflation, as well as the interpretation of movements in monetary aggregates. Empirically, the article evaluates the informational content of money as an indicator of inflationary pressures in Chile, and examines whether the recent evolution of M1A is consistent with money demand fundamentals. The evidence indicates that the recent trajectory of money does not represent a material risk to the achievement of the inflation target. |
| From Policy Rates to Bank Lending Rates: The Chilean Banking Industry Solange Berstein J. / Rodrigo Fuentes S. Many authors have studied the flexibility of bank interest rates in different countries. In this paper we show some evidence for the Chilean banking industry, concluding that there is some sluggishness in the adjustment of banks’ lending rates to changes in the policy rate. However, Chile is among the countries with the most flexible interest rates. On the basis of individual bank data and a theoretical model, we identified some bank characteristics that might affect the degree of stickiness. Stylized facts and estimation results suggest that larger banks with a smaller portion of past-due loans and a higher percentage of household loans adjust faster to policy rate movements. |
| RESEARCH NOTES |
| Medición de Cuentas Nacionales Basada en Índices Encadenados Gerardo Aceituno P. / Gonzalo Encina T. / Antonio Escandón A. |
| Empalme de Series Anuales y Trimestrales del PIB Victor Correa S. /Antonio Escandón A ./ René Luengo P. / José Venegas M. |
| Revisión de Libros |
| Economics Reforms in Chile From Dictatorship to Democracy de Ricardo Ffrench-Davis Manuel R. Agosín T. Risky Behavior Among Youths: An Economic Analysis de Jonathan Gruber, editor Harald Beyer |
| PUBLICATIONS REVIEW |