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Explaining inflation and output volatility in Chile: an empirical analysis of forty years

Cesar Salazar and Juan de Dios Tena ()

DES - Working Papers. Statistics and Econometrics. WS from Universidad Carlos III de Madrid. Departamento de Estadística

Abstract: We present a data oriented analysis of the effect of different kind of economic shocks on Chilean output growth and inflation over the last 40 years. Two important results are: (1) foreign shocks only explain 17% of the variability of the output growth in the period 1984-2006 whereas it used to account for the 47,2% of output variability in 1966-1983; (2) The participation of foreign shocks to explain the Chilean inflation reaction becomes more importan in the last twienty years because of the price liberalization and Chile's openness to international trade. Results highlight specific features of the Chilean economy not present in other countries.

Keywords: Trade; openness; Volatility; of; inflation; and; output; growth; Structural; VAR; models (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-mac and nep-mon
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Journal Article: Explaining inflation and output volatility in Chile: an empirical analysis of forty years (2008) Downloads
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