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Copper and the Chilean Economy, 1960-98

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  • Antonio Spilimbergo

Abstract

This paper studies the links between world copper prices and the Chilean economy. The main conclusion is that world copper prices play an important role in short-term economic fluctuations. While many mechanisms may be at work, investment seems to play a major role. During a copper price boom, the higher copper revenues and associated capital inflows create upward pressure on the real exchange rate. In turn the, appreciation of the Chilean peso during the first part of the copper cycle contributes to lower inflation, which could explain why real wages grow more rapidly in this part of the cycle.

Suggested Citation

  • Antonio Spilimbergo, 2002. "Copper and the Chilean Economy, 1960-98," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(2), pages 115-126.
    • Handle: RePEc:taf:jpolrf:v:5:y:2002:i:2:p:115-126
    DOI: 10.1080/13841280214094
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    1. Mr. Robert Brandon Kahn & Mr. Adam Bennett & Ms. María Vicenta Carkovic S. & Ms. Susan M Schadler, 1993. "Recent Experiences with Surges in Capital Inflows," IMF Occasional Papers 1993/010, International Monetary Fund.
    2. Calvo, Guillermo A. & Mendoza, Enrique, 1998. "Empirical Puzzles of Chilean Stabilization Policy," Working Papers 98-02, Duke University, Department of Economics.
    3. Agnès Belaisch & Claudio Soto, 1998. "Empirical Regularities of Chilean Business Cycles," Working Papers Central Bank of Chile 41, Central Bank of Chile.
    4. Mr. Esteban Jadresic, 1997. "What Type of Contracts Underlie Aggregate Wage Dynamics?," IMF Working Papers 1997/067, International Monetary Fund.
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    Cited by:

    1. Balazs Egert & Carol Leonard, 2008. "Dutch Disease Scare in Kazakhstan: Is it real?," Open Economies Review, Springer, vol. 19(2), pages 147-165, April.
    2. Juan Pablo Medina & Claudio Soto, 2007. "Copper Price, Fiscal Policu and Business Cycle in Chile," Working Papers Central Bank of Chile 458, Central Bank of Chile.
    3. repec:onb:oenbwp:y::i:106:b:1 is not listed on IDEAS
    4. Egert, Balazs, 2005. "Equilibrium exchange rates in South Eastern Europe, Russia, Ukraine and Turkey: Healthy or (Dutch) diseased?," Economic Systems, Elsevier, vol. 29(2), pages 205-241, June.
    5. Tapia, J. & Tolorza, V. & Durán, P. & Poblete, N. & Schneider, B., 2018. "Assessment of geologic programs in higher educational institutions of Chile," International Journal of Educational Development, Elsevier, vol. 59(C), pages 70-85.
    6. Gkillas, Konstantinos & Konstantatos, Christoforos & Papathanasiou, Spyros & Wohar, Mark, 2023. "Estimation of value at risk for copper," Journal of Commodity Markets, Elsevier, vol. 32(C).
    7. Balázs Égert, 2012. "Dutch diease in the post-soviet countries of central and south-west Asia: How contagious is it?," Post-Print hal-01385841, HAL.
    8. Égert, Balázs, 2009. "Dutch disease in former Soviet Union: witch-hunting?," BOFIT Discussion Papers 4/2009, Bank of Finland Institute for Emerging Economies (BOFIT).
    9. repec:onb:oenbfi:y:2004:i:2:b:6 is not listed on IDEAS
    10. Buncic, Daniel & Moretto, Carlo, 2015. "Forecasting copper prices with dynamic averaging and selection models," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 1-38.
    11. Stijn Claessens & M. Ayhan Kose & Marco E. Terrones, 2011. "Recessions and Financial Disruptions in Emerging Markets: A Bird’s Eye View," Central Banking, Analysis, and Economic Policies Book Series, in: Luis Felipe Céspedes & Roberto Chang & Diego Saravia (ed.),Monetary Policy under Financial Turbulence, edition 1, volume 16, chapter 4, pages 059-104, Central Bank of Chile.
    12. Bernardina Algieri, 2011. "The Dutch Disease: evidences from Russia," Economic Change and Restructuring, Springer, vol. 44(3), pages 243-277, August.
    13. Tapia, Pablo & Pastén, Boris & Sepulveda Velasquez, Jorge, 2022. "Earthquakes in Chile-Peru and the price of copper," MPRA Paper 113078, University Library of Munich, Germany.
    14. International Monetary Fund, 2005. "Chile: Selected Issues," IMF Staff Country Reports 2005/316, International Monetary Fund.
    15. Fernandez, Viviana & Pastén-Henríquez, Boris & Tapia-Griñen, Pablo & Wagner, Rodrigo, 2023. "Commodity prices under the threat of operational disruptions: Labor strikes at copper mines," Journal of Commodity Markets, Elsevier, vol. 32(C).
    16. Balázs Égert & Carol S. Leonard, 2006. "The Dutch Disease in Kazakhstan: An Empirical Investigation," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 85-108.
    17. Medina, Juan Pablo & Soto, Claudio, 2016. "Commodity prices and fiscal policy in a commodity exporting economy," Economic Modelling, Elsevier, vol. 59(C), pages 335-351.
    18. J. Fernando Larios-Meoño & Benoit Mougenot & V. Josué Álvarez-Quiroz, 2021. "Short-Run and Long-Run Effects of Copper Mining on Peru’s Recent Economic Growth," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 27(2), pages 131-145, May.
    19. Balázs Égert, 2004. "Equilibrium Exchange Rates in Southeastern Europe, Russia, Ukraine and Turkey: Healthy or (Dutch) Diseased?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 138-181.

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