Trend GDP and the output gap are key inputs for policy evaluation and forecasting in standard models of monetary policy. However, the measurement of these variables is plagued with difficulties. In this paper we propose two different approaches. First, a data-based approach, that starts with the...

The importance of the monetary transmission mechanisms calls for a thorough study of the possible channels by which it can influence the instrument used. The traditional mechanism is an increase in the interest rate that reduces pressures on prices from the demand side. Nevertheless, another...

Price stability is now the paramount objective for the vast majority of modern central bankers. Combined with changes in central bank structure, this policy framework has yielded low and stable inflation that has brought with it high and stable growth. Taking recent successes as a starting...

Investment equations are estimated for Chile, between 1986 and 2001, with the objective of building forecast and simulations of this variable. Investment behavior plays a crucial role in macroeconomic fluctuations in the short run, but also in capital and output grow in the long run. Hence,...

Strong swings in business cycle conditions in industrial and emerging market economies (EMEs) alike have renewed the debate on effectiveness of stabilization policies. Traditionally it has been argued that EMEs are unable to pursue counter-cyclical monetary and fiscal policies due to financial...

This paper attempts to reconcile the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity. On the one hand, the empirical growth literature finds a positive effect of financial depth as measured by, for instance, private...

Oil price increases and the restrictions to natural gas imports from Argentina generate multiple effects which ripple throughout the Chilean economy. The magnitude of the aggregate, sectoral and distributive impacts associated with these changes in the energy sector is debated. In this paper,...

This paper provides a simple analytical framework to decompose breakeven inflation. Estimates suggest that one and two years ahead, breakeven inflations are strongly linked to inflation expectations, and that their recent values are not necessarily inconsistent with complying with the inflation...

This paper studies savings and life insurance adequacy using a financial planning software package, ESPlanner. This program computes the highest sustainable living standard for the household based on an elaborated life cycle planning model. ESPlanner was used in financial planning sessions with...

This paper proposes a framework to assess the convenience of the current public debt denomination of the Chilean Government, through its implications on fiscal budget risk management. A “Value at Risk” methodology is proposed to compare alternative denominations regarding currency and...