Estimating Potential Output in Chile: A Multivariate Filter for Mining and Non-Mining Sectors

Patrick Blagrave and Marika Santoro

No 2016/201, IMF Working Papers from International Monetary Fund

Abstract: Using a multivariate filter, we estimate potential growth rates in Chile’s mining and non-mining sectors. Estimates for the mining sector incorporate information on copper prices, whereas estimates for non-mining reflect information on inflation and unemployment rates. To better understand the drivers of potential growth, we decompose estimates into capital, labor (adjusted for human-capital and hours worked), and total-factor productivity using a production-function. Our estimates of potential output in Chile suggest that an important part of the recent growth slowdown has been structural, with potential-output growth slowing to 2½ percent in recent years, although it plausibly could be higher in the medium-term.

Keywords: WP; Macroeconomic Modeling; Potential Output; Production Function; mining-sector output gap; trend copper-price movement; copper-price gap; production-function accounting; gap shock; MVF estimate; output-gap equation; trend output; MVF estimation result; price change; Mining sector; Output gap; Metal prices; Total factor productivity; Global (search for similar items in EconPapers)
Pages: 32
Date: 2016-10-14
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Citations: View citations in EconPapers (4)

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