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Chile menos volátil

Listed author(s):
  • Larraín B., Felipe

    (Instituto de Economía, Pontificia Universidad Católica de Chile)

  • Parro, Francisco

    (University of Chicago)

Between 1988 and 1998 Chile’s average economic growth reached 7.8%. Nonetheless, growth decelerated sharply after the Asian Crisis; since 1998 the average economic expansion was only 3.7%. Along with this deceleration, the volatility of the economy was cut by more that half. Using a formal empirical analysis, this paper investigates the role that adoption of both a floating exchange rate scheme and the use of the Structural Surplus Rule had in transforming Chile into a less volatile economy. Our results show that the introduction of the fiscal rule allowed for a reduction in the volatility of GDP growth by one third. On the other hand, the introduction of the flexible exchange rate mechanism contributed to reduce the volatility by one quarter. Thus, jointly, both policy reforms diminished the volatility of the Chilean economy by almost 60%. These results are robust to alternative specifications and possible endogeneity problems in some of the explanatory variables.// Desde fines de 1998 la economía chilena se desaceleró mucho. Si entre 1988 y 1998 la tasa de crecimiento promedio alcanzó un 7.8%, durante el período postcrisis asiática fue de sólo un 3.7%. Sin embargo, junto con la desaceleración del crecimiento, la volatilidad de la economía se redujo prácticamente a la mitad.Este trabajo investiga, mediante un análisis empírico formal, el papel que tuvieron la introducción de la flotación cambiaria y la utilización de la regla de superávit estructural en transformar a Chile en una economía menos volátil. Nuestros resultados muestran que la introducción de la regla fiscal parece haber reducido en un tercio la volatilidad del crecimiento del PIB. Por su parte, la flotación cambiaria contribuyó a reducir esa volatilidad adicionalmente en alrededor de un cuarto. Así, en conjunto, ambas medidas aparecen como responsables de haber disminuido la volatilidad del crecimiento de la economía chilena en casi 60%. Estos resultados son robustos ante especificaciones y posibles problemas de endogeneidad en algunas de las variables explicativas.

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Article provided by Fondo de Cultura Económica in its journal El Trimestre Económico.

Volume (Year): LXXV (3) (2008)
Issue (Month): 299 (julio-septiembre)
Pages: 563-596

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Handle: RePEc:elt:journl:v:75:y:2008:i:299:p:563-596
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