Banco Central de ChileRevista Economía Chilena
Published Issues
Volume 6 Nº 2 Agosto 2003
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| ARTICLES |
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| Monetary Policy Nominalization in Chile: an Evaluation R. Fuentes S.; A. Jara R. ; K. Schmidt-Hebbel D. y M. Tapia G. In August of 2001, the Central Bank of Chile modified its main monetary policy instrument, the inflation-indexed monetary policy interest rate MPR it had used so far, to a nominal or peso-denominated rate. A number of consequences, both in the conduct of monetary policy and in the country’s financial markets, can be associated to this new way of taking monetary policy actions. This article evaluates such effects, providing theoretical support and evidence to several hypotheses, some of them found in the existing literature. The main contribution of this so-called “nominalization”—that has not been discussed earlier—is that it extends the scope of operation of monetary policy, something that becomes important when both the interest rate and the inflation rate are low, as is the case today. |
| The Impact of Monetary Policy on the Bilateral Exchange Rate: Chile Versus the United States Jeromin Zettelmeyer This paper examines the reaction of the bilateral Ch$/US$ exchange rate to monetary policy actions in Chile and the United States. The approach is to regress the variation in the exchange rate following a policy announcement on variations in market interest rates in response to the same announcement. U.S. monetary policy actions that raise the three-month Treasury bill rate by 1 percentage point lead to depreciations of the Chilean peso by about 1.5 to 2 percent. The exchange rate also reacts to monetary policy actions in Chile, but the response appears to be smaller, and cannot be estimated with much precision on the available sample. |
| Market Discipline in Depositors’ Behavior and the Role of Risk-Rating Agencies: The Case of Chile Carlos Budnevich L. y Helmut Franken M. This study re-examines the evidence of market discipline in depositors’ behavior in the Chilean banking system, and analyzes the role of risk-rating agencies in complementing the information available to the market for evaluating bank solvency in Chile. With that in mind, we use data on deposits by size and institutional sector, effective interest rates on time deposits, a set of indicators that reflect the solvency of banks, and the risk rates of bank-issued fixed-income securities. Our results for Chile show that the empirical evidence about market discipline tends to be stronger and more robust when measured by the interest rate, as opposed to the rate of growth of time deposits. Our empirical assessment regarding the role of risk-rating agencies in disseminating relevant information that promotes market discipline is inconclusive. On the one hand, we find some evidence in favor of the hypothesis that the analytical contribution of these entities cannot be replaced by more direct indicators of bank solvency, which can be constructed with publically available information. On the other, we find other evidence that tend to weaken the previous hypothesis. |
| RESEARCH NOTES |
| Relación entre el Tipo de Cambio y el Spread Soberano: ¿ Es Chile Diferente? Alberto Naudon D. ; Ivonne Vera R. ; Rodrigo Valdés P. |
| Medidas Alternativas de Brechas en Modelos de Inflación William Baeza L. ; Pablo García |
| Books review |
| Financial Policy and Central Banking in Japan de Thomas F. Cargill, Michael M. Hutchison y Takatoshi Ito Rodrigo Vergara M. After the Washington Consensus: Restarting Growth and Reform in Latin America editado por Pedro Pablo Kuczynski y John Williamson. Ricardo Ffrench-Davis M |
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