Capital account policies in Chile : macro-financial considerations along the path to liberalization

Yan Carrière-Swallow; Pablo García-Silva

This paper recounts Chile's experience with capital account policies since the 1990s. We present how two external shocks were confronted under very different macroeconomic and capital account frameworks. We show that during the 1997-98 Asian-LTCM-Russia crisis, a closed capital account and relatively rigid exchange rate severely constrained the monetary policy response to the shock, aggravating the fall in domestic demand. During the 2008-09 crisis, a full-fledged inflation targeting framework allowed the authorities to implement a significant countercyclical response. We argue that domest

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Year of publication:	2013
Authors:	Carrière-Swallow, Yan ; García, Pablo
Publisher:	Washington, DC : IMF
Subject:	Kapitalverkehrskontrolle \| Capital controls \| Geldpolitik \| Monetary policy \| Wechselkurspolitik \| Exchange rate policy \| Inflationssteuerung \| Inflation targeting \| Chile \| 1990-2009

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Extent:	Online-Ressource (31 S.) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 13/107
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Description based upon print version of record Systemvoraussetzungen: Acrobat Reader Cover; Contents; I. Introduction; Figures; Figure 1: Chile's foreign assets and liability stocks; Figure 2: De jure measures of capital account liberalization in Chile; II. Aiming to secure export-led growth; A. The implementation of CFMs in the nineties; Figure 3: Capital account as a percentage of GDP; Figure 4: The exchange rate band and the nominal observed rate; Figure 5: Monetary policy rates, adjusted for inflation; B. Facing the Russian-LTCM crisis; Figure 6: The real exchange rate, unemployment rate, and share of total employment from agriculture, fishing & forestry Figure 7: External conditions facing Chile during the Asian financial crisisFigure 8: Pension fund assets invested abroad, as a percentage of total assets; III. Securing stability in a volatile world; A. The initiation of the liberalization process; B. Domestic financial developments; Figure 9: Evolution of Chilean currency derivatives market; net forward positions, million USD; Figure 10: Net external position in NDF contracts, and international reserves; millions of U.S. dollars; C. Facing the global financial crisis and the Great Recession Figure 11: External conditions facing Chile during the Lehman crisisIV. Evidence for the effectiveness of capital controls; V. External influence on the shifting stance of Chilean capital account policies; VI. Conclusions; VII. References; Figure A1: The Chilean economy during the Asian crisis; Figure A2: The Chilean economy during the Lehman Brothers crisis
ISBN:	978-1-4843-3146-0
Other identifiers:	10.5089/9781484331460.001 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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