Money as an Inflation Indicator in Chile
Author | : Tobías Broer |
Publisher | : |
Total Pages | : 42 |
Release | : 2004 |
Genre | : Inflation (Finance) |
ISBN | : |
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Author | : Tobías Broer |
Publisher | : |
Total Pages | : 42 |
Release | : 2004 |
Genre | : Inflation (Finance) |
ISBN | : |
Author | : Frank Whitson Fetter |
Publisher | : Princeton, U. P |
Total Pages | : 248 |
Release | : 1931 |
Genre | : Business & Economics |
ISBN | : |
Author | : Mrs.Esther Perez Ruiz |
Publisher | : International Monetary Fund |
Total Pages | : 33 |
Release | : 2016-07-06 |
Genre | : Business & Economics |
ISBN | : 1498350976 |
This paper examines inflation dynamics in Chile during the last peso depreciation episode 2013-15. The evidence is for substantial pass-through effects to inflation, given the large and persistent depreciation movement. Widespread indexation practices in non-traded goods markets are found to amplify the inflation response to the depreciation, while the role of wage indexation is less relevant to the inflation dynamics. Overall, inflation would have remained within the central bank’s target band absent the peso depreciation. The analysis also shows that tightening monetary policy in response to a depreciation shock can be costly in terms of output: the response of activity to rates is found to be strong, while the transmission from activity to inflation is found to be weak. Simulations under uncertainty about the extent of the pass-through also suggest that monetary policy can play a countercyclical role in the face of depreciation shocks at a moderate inflationary cost, as long as inflation expectations remain anchored.
Author | : International Monetary |
Publisher | : International Monetary Fund |
Total Pages | : 47 |
Release | : 2021-05-21 |
Genre | : Business & Economics |
ISBN | : 1513572989 |
The pandemic hit the Chilean economy while it was recovering from the 2019 social unrest. The authorities’ swift and strong economic policy efforts and Chile’s very strong institutional frameworks helped buffer the economic and social consequences. The ongoing economic recovery continues to be supported by ample policy stimulus, a rapid vaccination process, well-anchored inflation expectations, a resilient export base, and continued market confidence.
Author | : Christian A. Johnson |
Publisher | : |
Total Pages | : 18 |
Release | : 2013 |
Genre | : |
ISBN | : |
Central bank authorities base implementation of monetary policy on an analysis of multiple variables known as monetary policy indicators. In a small open economy such as Chile, these indicators may include inflation misalignments, unemployment, GDP growth, money growth, the current account balance, exchange rate volatility and international reserves. A neural network approach is used to establish the corresponding weights considered by the Board of the Central Bank of Chile during the period 1995-2003. GDP growth and the difference between the actual and the target inflation were found to be among the variables of greatest weight in the monetary policy decision-making process of the Central Bank of Chile during this period.
Author | : Mr.Enrique G. Mendoza |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 1991-05-01 |
Genre | : Business & Economics |
ISBN | : 1451971664 |
Legal restrictions governing financial transactions in Chile have produced a system in which most financial assets are either 30-day non-indexed assets or 90-day indexed assets. This paper analyzes data on the rates of return of these assets to determine the extent to which efficient arbitrage takes place under conditions of partial financial indexation. The data cannot reject the joint hypothesis that participants in financial markets formulate their expectations rationally and that these markets operate efficiently. The data also shows that the indexed/non-indexed interest spread is an accurate predictor of future changes in inflation. The significant implications of these findings for the conduct of monetary policy are also discussed in some detail.
Author | : Vittorio Corbo |
Publisher | : Amsterdam : North-Holland Publishing Company ; New York : American Elsevier |
Total Pages | : 314 |
Release | : 1974 |
Genre | : Chile |
ISBN | : |
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 40 |
Release | : 1994-08 |
Genre | : Business & Economics |
ISBN | : |
This paper reviews empirical evidence on the operation of the monetary transmission mechanism based on targeting of interest rates on indexed assets in the Chilean economy. The empirical evidence has two policy implications. First, interest rates on indexed assets do not fully reflect real interest rates because of imperfections of backward indexation magnified by the variability of monthly inflation. Second, while substantial adjustments to interest rates on indexed assets affect the cyclical position of output and inflation, there is no evidence of a stable, systematic relationship between these three variables. In contrast, money growth and unexpected inflation play a significant role in the transmission mechanism. This evidence calls for an eclectic approach to monetary policy. This is a Paper on Policy Analysis and Assessment and the author(s) would welcome any comments on the present text. Citations should refer to a Paper on Policy Analysis and Assessment of the International Monetary Fund, mentioning the author(s) and the date of issuance. The views expressed are those of the author(s) and do not necessarily represent those of the Fund.
Author | : Jongrim Ha |
Publisher | : World Bank Publications |
Total Pages | : 513 |
Release | : 2019-02-24 |
Genre | : Business & Economics |
ISBN | : 1464813760 |
This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.
Author | : Vittorio Corbo |
Publisher | : World Bank Publications |
Total Pages | : 54 |
Release | : 1989 |
Genre | : Chike |
ISBN | : |
Restructuring the public sector and eradicating chronic public sector deficits helped Chile lay the basis for microeconomic reforms that removed distortions and put Chile in a sustainable growth path. But macroeconomic policy errors of the late 1970s delayed the growth effects of these reforms.