Política y Sostentabilidad Fiscal en tiempos de Covid-19: El Caso de Chile

Fiscal Policy in Covid-19 Times: The Case of Chile

Alvaro Cordero and Mauricio Villena

MPRA Paper from University Library of Munich, Germany

Abstract: The fiscal stimulus initially proposed by the Chilean government to support COVID-19 measures contemplates US$ 17.105 billion and corresponds to 6.9% of GDP. This paper seeks to contribute to the discussion on fiscal policy in times of pandemic by analyzing the country's fiscal measures to address COVID-19 and comparing them with those applied by other countries, and with those used to address the 2009 subprime financial crisis. It also discusses what measures could complement the government's Emergency Plan. The second part of the paper presents a discussion of the evolution of the central government's finances (as a percentage of GDP) from 1990 to 2019. Together with this, the ex post calculation of vulnerability and fiscal sustainability indicators adapted to the Chilean fiscal reality is discussed. In particular, we estimate the following Sustainability indicators: (I) Gross Debt / GDP (Chilean experience and a comparative analysis with countries with a GDP per capita similar to the national one, and emerging countries with a reputation of solid fiscal positions); (II) Net Debt / GDP; (III) Debt Service; (IV) Acid Test for Debt Service; (V) Primary Balance (IMF methodology); (VI) Adapted Sustainable Primary Balance and (VII) Macro-Adjusted Primary Balance.

Keywords: Public Finances; Macroeconomics; Public Debt; Fiscal Sustainability; COVID-19; Chile. (search for similar items in EconPapers)
JEL-codes: E62 H60 O1 O11 O23 (search for similar items in EconPapers)
Date: 2020-05-20, Revised 2020-05-20
New Economics Papers: this item is included in nep-mac
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