Policy Responses to external Shocks in Australia, Brazil and Chile

Open economies, particularly emerging markets and commodity-intensive economies, deal with large external shocks. Alternative policy reactions and policy setups may dampen or amplify the consequences of these shocks, affecting the magnitude of the effects. This paper revisits the recent experience of policy frameworks and reactions in Australia, Brazil and Chile. In particular, we describe the recent experience of these countries by providing an account of the macroeconomic policy framework and the policy reactions to the major shocks of the past eight years, and draw some policy lessons.