Efectos de Shocks al Precio del Petróleo sobre la Economía de Chile y sus Socios Comerciales

With the objective of evaluating the impact of oil price shocks on the Chilean economy, this paper applies the sign restriction methodology to impulse-response functions in order to distinguish the effects of different types of shocks, namely supply, demand, or oil-specific demand. It also applies the exercise to the aggregate trade partners (TP) of Chile, as well as its four main TPs: China, the United States, the Eurozone, and Japan. The main results are the following. Consumer price indices increase both for Chile and its TPs in response to oil supply and world demand shocks, while they differ for oil-specific demand shocks. On the other hand, oil supply problems have a negative impact on Chilean output, but null effect on its TPs. The behavior of interest rates points at differences between Chile and its TPs. Regarding the nominal exchange rate, it depreciates for Chile when the oil price increases due to supply or oil-specific demand shocks, and it appreciates in response to an increase in world demand.