The Implementation of Monetary Policy in an Emerging Economy: The Case of Chile

Christian Johnson () and Rodrigo Vergara ()

No 291, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: Central bank authorities base implementation of monetary policy on an analysis of multiple variables known as monetary policy indicators. In a small open economy such as Chile, these indicators may include inflation misalignments, unemployment, GDP growth, money growth, the current account balance, exchange rate volatility and international reserves. A neural network approach is used to establish the corresponding weights considered by the Board of the Central Bank of Chile during the period 1995-2003. GDP growth and the difference between the actual and the target inflation were found to be among the variables of greatest weight in the monetary policy decision-making process of the Central Bank of Chile during this period.

Keywords: Monetary Policy; Neural Network (search for similar items in EconPapers)
JEL-codes: C45 E52 (search for similar items in EconPapers)
Date: 2005
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Published as "The Implementation of Monetary Policy in an Emerging Economy: The Case of Chile", Revista de Análisis Económico, Vol. 20, Nº 1, pp. 45-62, junio 2005.

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Journal Article: The implementation of monetary policy in an emerging economy: the case of Chile (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:291

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