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A Toolkit for Analyzing Alternative Policies in the Chilean Economy

In: General Equilibrium Models for the Chilean Economy

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  • Rómulo A. Chumacero

    (Banco Central de Chile)

Abstract

This paper presents a general equilibrium model for a small open economy that can be used to assess the effects of alternative policies. The model is estimated in order to replicate key characteristics of the Chilean economy by using the gradients of an Identified VAR model as matching conditions for the theoretical model. The theoretical model is sufficiently general so that it can be used to analyze issues such as alternative exchange rate regimes, controls to capital inflows, inflation targeting, and other policies used by the monetary authority. A distinguishing feature of this model is that it explicitly models the attitudes of foreign investors.
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Suggested Citation

  • Rómulo A. Chumacero, 2005. "A Toolkit for Analyzing Alternative Policies in the Chilean Economy," Central Banking, Analysis, and Economic Policies Book Series, in: Rómulo A. Chumacero & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (S (ed.),General Equilibrium Models for the Chilean Economy, edition 1, volume 9, chapter 8, pages 261-302, Central Bank of Chile.
    • Handle: RePEc:chb:bcchsb:v09c08pp261-302
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    References listed on IDEAS

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    14. Chumacero Rómulo A., 1997. "Finite Sample Properties of the Efficient Method of Moments," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 2(2), pages 1-19, July.
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    18. Rómulo Chumacero & Jorge Quiroz, 1996. "La Tasa Natural de Crecimiento de la Economía Chilena: 1985-1996," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 33(100), pages 453-472.
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    Cited by:

    1. Felipe Beltrán & David Coble, 2023. "Monetary Policy Surprises on the Banking Sector: the Role of the Information and Pure Monetary Shocks," Working Papers Central Bank of Chile 979, Central Bank of Chile.
    2. Verónica Mies & Felipe Morandé & Matías Tapia, 2002. "Política Monetaria y Mecanismos de Transmisión: Nuevos Elementos para una Vieja Discusión," Working Papers Central Bank of Chile 181, Central Bank of Chile.
    3. Marco Del Negro & Frank Schorfheide, 2009. "Inflation Dynamics in a Small Open Economy Model under Inflation Targeting: Some Evidence from Chile," Central Banking, Analysis, and Economic Policies Book Series, in: Klaus Schmidt-Hebbel & Carl E. Walsh & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.),Monetary Policy under Uncertainty and Learning, edition 1, volume 13, chapter 13, pages 511-562, Central Bank of Chile.
    4. Rómulo A. Chumacero & Klaus Schmidt-Hebbel, 2005. "General Equilibrium Models: An Overview," Central Banking, Analysis, and Economic Policies Book Series, in: Rómulo A. Chumacero & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (S (ed.),General Equilibrium Models for the Chilean Economy, edition 1, volume 9, chapter 1, pages 001-027, Central Bank of Chile.
    5. Jhon Alexander Méndez Sayago & Hugo Alfonso Hernández Escolar, 2014. "Relación de largo plazo y análisis de causalidad y sensibilidad entre los salarios reales y la productividad laboral en el sector manufacturero a partir de cifras de los departamentos en Colombia," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 6(2), pages 341-366, September.
    6. Boragan Aruoba & Andrés Fernández & Daniel Guzmán & Ernesto Pastén & Felipe Saffie, 2021. "Monetary Policy Surprises in Chile: Measurement & Real Effects," Working Papers Central Bank of Chile 921, Central Bank of Chile.
    7. Luis A.V. Catão & Adrian Pagan, 2011. "The Credit Channel and Monetary Transmission in Brazil and Chile: A Structured VAR Approach," 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 5, pages 105-144, Central Bank of Chile.
    8. Eric Parrado, 2001. "Effects of Foreign and Domestic Monetary Policy in a Small Open Economy: the Case of Chile," Working Papers Central Bank of Chile 108, Central Bank of Chile.
    9. Héctor Bravo L. & Carlos García T., 2002. "Measuring Monetary Policy and Pass-Through in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(3), pages 5-28, December.
    10. Miranda, Jorge, 2012. "Tipo de Cambio Real en Chile: Dinámica, Tendencia y Equilibrio [Real Exchange Rate in Chile: Dynamics, Trend and Equilibrium]," MPRA Paper 43076, University Library of Munich, Germany.
    11. Roberto Duncan, 2005. "How Well Does a Monetary Dynamics Equilibrium Model Account for Chilean Data?," Central Banking, Analysis, and Economic Policies Book Series, in: Rómulo A. Chumacero & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (S (ed.),General Equilibrium Models for the Chilean Economy, edition 1, volume 9, chapter 6, pages 189-220, Central Bank of Chile.
    12. Pablo Pincheira B & Álvaro García M, 2007. "Oil Shocks and Inflation The Case Of Chile and a Sample of Industrial Countries," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 10(1), pages 5-36, April.
    13. Jorge Hermann & Rómulo Chumacero, 2005. "No Estaba Muerta, ...: La Teoría Cuantitativa y la Relación entre Dinero e Inflación," Working Papers Central Bank of Chile 324, Central Bank of Chile.
    14. Verónica Mies M. & Felipe Morandé L. & Matías Tapia G., 2002. "Monetary Policy and Transmission Mechanisms: New Elements for an old Debate," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(3), pages 29-66, December.
    15. Patricio Jaramillo, 2009. "Estimación de VAR Bayesianos para la Economía Chilena," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 24(1), pages 101-126, Junio.
    16. González, Manuel, 2004. "La Curva de Retorno y el Modelo C-CAPM: Evidencia para Chile," MPRA Paper 309, University Library of Munich, Germany.
    17. Eric Parrado H., 2001. "Foreign Shocks and Monetary Policy Transmission in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 4(3), pages 29-57, December.
    18. Martín Palmero Pantoja, 2014. "Un modelo SVAR para la economía Boliviana," Investigación & Desarrollo 0514, Universidad Privada Boliviana, revised Jan 2014.

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