The Implementation of Monetary Policy in an Emerging Economy: The Case of Chile
AbstractCentral bank authorities base implementation of monetary policy on an analysis of multiple variables known as monetary policy indicators. In a small open economy such as Chile, these indicators may include inflation misalignments, unemployment, GDP growth, money growth, the current account balance, exchange rate volatility and international reserves. A neural network approach is used to establish the corresponding weights considered by the Board of the Central Bank of Chile during the period 1995-2003. GDP growth and the difference between the actual and the target inflation were found to be among the variables of greatest weight in the monetary policy decision-making process of the Central Bank of Chile during this period.
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Bibliographic InfoPaper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 291.
Date of creation: 2005
Date of revision:
Publication status: Published as "The Implementation of Monetary Policy in an Emerging Economy: The Case of Chile", Revista de AnÃ¡lisis EconÃ³mico, Vol. 20, NÂº 1, pp. 45-62, junio 2005.
Monetary Policy; Neural Network;
Other versions of this item:
- Christian A. Johnson & Rodrigo Vergara, 2005. "The implementation of monetary policy in an emerging economy: the case of Chile," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Economics Department, vol. 20(1), pages 45-62, June.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
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