This paper is part of the project "Financial Dedollarization: Policy Options" launched by the Inter-American Development Bank. The purpose of the project is to contribute to the policy dialogue on the macroeconomic and prudential risks associated with financial dollarization as well as to...

Using a new database on the currency composition of assets and liabilities, this paper explores the determinants and consequences of currency mismatches in Chilean non-financial firms. As in previous firm level studies for Chile, we find that in periods following a depreciation firms with higher...

This paper presents evidence on the impact of labor regulations on income inequality using two recently published databases on labor institutions and outcomes (Rama and Artecona, 2002; Botero, Djankov, La Porta, López-de-Silanes and Shleifer, 2003) and different cross-section and panel data...

The first five years of the flexible exchange rate and inflation targeting regime in Chile have shown positive results. Inflation is under control, the exchange rate has moved with the external conditions, monetary policy has been countercyclical and the cycle has apparently smoothened. Even...

The stability of the demand for money is of primary importance for the design of monetary policy. If it is found that a stable long term relation exists then the monetary authority should set strict monetary targets for this term if it wants to keep infla

This paper studies the case of the Chilean telecommunication sector, which has been subject to a deregulation process during the last decade. Important firms that were historically owned and managed by the Public Sector have been recently transfered to pr

This paper revisits the Chilean experience with dollarization, indexation and nominalization in the 1958-2003 period. The purpose is to understand how Chile generally avoided dollarization and actually de-dollarized in the 1980s in order to draw some lessons for other countries. We find that...

The objective of this paper is to examine the relation between automatic price and salary indexation and the cost of reducing inflation. The analysis complements previous work done by Ball (1994, 1995), Bonomo and Garcia (1995) and Jadresic (1995, 1996), but with an emphasis on the consequences...

In a standard New-Keynesian model for a small open economy, we derive the efficient CPI inflationbased Taylor rule. We conclude that the natural rate of interest, based on CPI inflation, must be directly linked to the foreign interest rate, as well as to domestic productivity shocks. In this way...