Banco Central de ChileRevista Economía Chilena
Published Issues
Volume 7 Nº 3 December 2004
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| About International Reserve Adequacy: The Case of Chile Claudio Soto G. / Alberto Naudon D. / Eduardo López E. / Alvaro Aguírre R. Under a flexible exchange rate regime, international reserves contribute to reducing the risk of a financial crisis, and allow the monetary authority to intervene exceptionally in the exchange market. However, holding reserves is costly. In this paper, we analyze several issues concerning the adequate level of Chilean international reserves. First we compare the level of Chile's international reserves with those of different sets of countries, using various indicators. We then analyze empirically some of the benefits and costs of holding reserves. Our results show that Chile's international reserves are high when measured with respect to GDP or M2, but they are in line with those of countries of similar characteristics when measured as a fraction of short-term residual debt. On the other hand, given the low risk of the Chilean economy, marginal changes in reserves have a very low impact on both the probability of a financial crisis and the sovereign spread of the country. Finally, as the sovereign spread has decreased over the last years, so too has the cost of reserves. In fact, over the past few years Chile's cost of reserves as a fraction of GDP has been considerably lower than the cost of other emerging economies. |
| Use of Dynamic Factor Analysis in Macroeconomic Forecasts Álvaro Aguirre R. / Luis Felipe Céspedes C. This paper uses the dynamic factor analysis methodology developed by Stock and Watson (1998) in order to forecast inflation and the Imacec, an index of economic activity of common use for the Chilean economy. Our results indicate that using factors in the process of forecasting these macroeconomic variables improves significantly out of sample projections. Additionally, we find that factor augmented Phillips curve forecasts perform better than conventional Phillips curve forecasts based only on output gap measures. |
| Forecasting Chilean Industrial Production and Sales With Automated Procedures Rómulo Chumacero E. This paper presents a rigorous framework for evaluating alternative forecasting methods for Chilean industrial production and sales. While nonlinear features appear to be important for forecasting the very short term, simple univariate linear models perform about as well for almost every forecasting horizon. |
| Research Notes |
| Explicación del Movimiento del Tipo de Cambio ¿Qué Aporta el Diferencial de Tasas? Tobias P. Broer Bernardo Dominichetti H |
| Mediación de la Inversión Extranjera Directa en la Balanza de Pagos María Teresa Cofré U. Teresa Cornejo B. |
| Books review |
| “The Big Problem of Small Change” de Lucio Sarno y Mark P. Taylor CAMBRIDGE UNIVERSITY PRESS, 2002 Rómulo Chumacero E. The Economics of Exchange Rates César Calderón M |
| Publications Review |
| Catastro de publicaciones recientes y resúmenes de artículos seleccionados |