This paper estimates demand curve equations for Chilean non-copper exports, focusing on the role of the Real Exchange Rate (RER) during the period 1990-2013. This research is motivated by the substantial real depreciation over the last year which has led the Real Effective Exchange Rate (REER)...

Could prudential policies backfire by making the lack of commitment problem of bailouts worse? This commitment problem refers to the excessive risk taken by banks and financial institutions in expectations of bailouts if crises occur, which in turn increase financial fragility and the severity...

In 2014, the National Statistical Institute of Chile (INE) presented the Consumer Price Index (CPI) Methodology Manual with annual base 2013=100. In order to provide to the public extended series, consistent with the new series, this paper presents the results of a statistical linking exercise...

This paper reviews extensively the literature on asset pricing and builds a structural dynamic general equilibrium model with financial assets. We obtain the policy function of the calibrated model and approximate it up to third order. We derive asset pricing and various premiums conditions up...

This paper analyzes the recent evolution and the actual level of international reserves in Chile using complementary approaches. First, we compare the current level of international reserves of Chile with other countries, using as controls a set of indicators that are traditionally used in the...

During the last decades, technological innovation has generated a major transformation in payment systems, stimulating a widespread use of different forms of electronic money and increasing substitutability between deposits and currency in transactions. A big advantage of deposits is that,...

This paper analyzes the effectiveness of fiscal policy at zero nominal interest rates. I solve a stochastic general equilibrium model with sticky prices assuming that the government cannot commit to future policy. Real government spending increases demand by boosting public consumption. Deficit...

We explore the role of fiscal policy over the business cycle from a normative perspective, for a government with a highly volatile and exogenous revenue source. Instead of resorting to Keynesian mechanisms, in our framework fiscal policy plays a role because the government provides transfers to...

In this paper we analyze two risk measures using the Binomial Model. In one case we show that the distance-to-default measure is indeed a Z-statistic. In an empirical application we estimate the probability of default for Chilean banks. Our second measure is a pseudo implied volatility which is...