The purpose of this paper is to provide a decomposition of economic growth in Chile, based on the contribution of capital, labor, and total factor productivity (TFP) and to study the determinants of TFP behavior in Chile since 1960 to date. Our results indicate that the contribution of TFP to...

In this paper we estimate the output gap and the growth rate of potential output in Chile for the 1986-2005 period, using three different methods: (i) a production function approach, (ii) a Kalman filter approach (univariate and multivariate), and (iii) a structural vector autoregression (SVAR)....

This paper uses a consumer theory-based systemic approach to model the demand for monetary liquid asset holdings. We implement the suggestions and caveats of aggregation theory for the estimation of a demand system for liquid assets (monies) in static, dynamic and time-varying parameters setups....

The Central Bank of Chile replaced its monetary policy instrument in August 2001, shifting from a monetary policy rate (MPR) linked to an indexed unit of account (UF, defined by the lagged CPI) to a nominal MPR denominated in pesos. This policy change was complemented with a significant change...

Chile put into place broad free trade agreements (FTAs) with its two major trading partners: the EU (effective 2003) and the US (effective 2004). This paper quantifies their economic effects for the Chilean economy, stemming from the conventional trade components (lower tariffs and higher market...

This paper estimates the short-run reaction of an emerging financial market to monetary policy surprises. Using forward curve data to obtain the surprise component of policy decisions, we estimate the effects of a monetary shock on long-term nominal and real interest rates in Chile. Our results...

The fact that minimum wages seem especially binding for young workers has led some countries to adopt age-differentiated minimum wages. We develop a dynamic competitive two-sector labor market model where workers with heterogeneous initial skills gain productivity through experience. We compare...

The purpose of this paper is to examine the information contained in the term structure of inflation-linked interest rates in Chile with respect to expected future interest rates. Using the present discounted value methodology developed by Campbell and Ammer (1993), we decompose excess returns...

This paper studies the relationship between inflation compensation and inflation expectations in Chile. First, we use the present discounted value methodology to decompose the difference between the unanticipated return of nominal and inflation-linked bonds into news about expected inflation and...

This paper presents several methodologies for understanding the Chilean growth process. By using univariate time series representations, we find that the Chilean data is more consistent with exogenous than with endogenous growth models. Growth accounting exercises show that the mild growth rates...