To estimate how monetary policy works in small open economies, we build a dynamic stochastic general equilibrium model that incorporates the basic features of these economies. We conclude that the monetary policy in a group of small open economies (including Australia, Chile, Colombia, Peru, and...

This paper provides evidence about the effect of innovation on employment in Argentina in the period 1998-2001. In particular we quantify the impact of process and product innovations on employment growth and the skill composition. Our result show that (i) Product innovations have a positive...

We study technology adoption in a dynamic model of price competition. Adoption involves disruption costs and learning by doing. Because of disruption costs, the adopting firm begins in a market disadvantage, which may persist if its rival captures the buyers it needs to learn the technology. The...

Over the last twenty years there has been a deep concentration process in the Pension Fund Manager (AFPs) industry in Chile (from 21 firms in 1994 to only 6 in 2012). A major concern with the concentration of this industry is that firms might be able to exercise market power. However,...

This paper proposes an optimal strategy for stabilizing macroeconomic policy to address jointly the effects of changes in the prices of food, minerals and energy (oil). Our approach differs from the general literature, which analyzes the effects of a commodity boom and therefore the solutions in...

Este trabajo cuantifica el impacto de los shocks de energía sobre el ciclo económico chileno. El principal resultado es mostrar que no sólo los tradicionales shocks de petróleo son relevantes para explicar el ciclo económico, sino también los cambios significativos en el precio de la...

This article presents the hypothesis that exogenous shocks in the electricity market can affect the business cycle of the Chilean economy in the short and medium terms. The shocks are identified as the delays in power-generation investment that have characterized the sector in recent years. The...

Este artículo utiliza dos modelos macroeconómicos distintos, pero complementarios, para medir el efecto de algunos aspectos relevantes de la institucionalidad laboral de Chile respecto del ajuste y estructura de su mercado. Por un lado, se analiza cómo la rigidez de precios y salarios, junto...

This paper uses a DSGE model to examine whether including the exchange rate explicitly in the central bank’s policy reaction function can improve macroeconomic performance. It is found that including an element of exchange rate smoothing in the policy reaction function is helpful both for...