There is an ample literature whose main subject is to build models able to anticipate or provide some early warning signals of problematic financial institutions. This article overview these literature in an attempt to detect latent fragility in the Chilean financial system. Most applications in...

We estimate a cointegrated VAR of consumption, household money and their determinants in Chile.We find two long-run relations that can be specified as a classic money-demand equation and aconsumption equation that is homogenous in disposable income. We find that the household money overhang has...

This paper shows the results of the Capital Stock Project included in the upcoming 2003 Base Year Program now in progress in the National Accounts Department. The project has been prepared in accordance with the objectives and methodological framework set forth in the Program, and has benefited...

In this paper we use a set of methods to estimate the neutral interest rate for Chile (NRIR). We group the methods into three categories: methods derived from pure economic theory, the NRIR implicit in the price of financial assets, and the rate estimated from a statistical model using...

This paper characterizes Ramsey-optimal monetary policy in a medium-scale macroeconomic model that has been estimated to fit well postwar U.S. business cycles. We find that mild deflation is Ramsey optimal in the long run. However, the optimal inflation rate appears to be highly sensitive to the...

This article describes the Value at Risk concept, popularized during the last ten or fifteen years, presenting applications on stocks, bonds, interest and exchange rate forward contracts, and swaps. We applied asymmetric GARCH methodologies over Chilean stock indexes to enhance our risk...

We investigate the extent to which long-run inflation expectations are well anchored in three western hemisphere countries—Canada, Chile, and the United States—using a high-frequency event-study analysis. Specifically, we use daily data on far-ahead forward inflation compensation—the...

In this paper selective issues of long-run sustainability of monetary unions are analyzed. Using theoretical insights and the experience of EMU up to now we argue that empirical evidence on OCA criteria for EMU suggests that benefits for the countries participating in EMU outweigh costs by a...

The quality of the coordination of expectations, a key issue for monetary policy, obtains from different, but interrelated, channels: both the credibility of the central bank intervention and the ability of decentralized agents to coordinate on a dynamical equilibrium matter. For both purposes,...

Numerous resource rich economies have been far more dynamic than those in Latin America and there is little long term evidence that natural resource abundant countries generally under perform. But two factors historically distinguish Latin America from the more successful experiences of...