Las fluctuaciones cambiarias son una fuente importante de variaciones en la tasa de inflación de una economía. Ellas se manifiestan directamente en el precio de los bienes importados, e indirectamente a través del costo de los insumos importados que contienen algunos bienes y que se traspasan al precio. ...

Chile offers an example of a country that has overcome the fear of floating by reducing balance-sheet mismatches; enhancing financial-market development; and improving monetary, fiscal, and political institutions; while strengthening policy credibility. Under the floating regime, Chile’s economic ...

One of the most popular pieces of wisdom in economic policy is the idea that fiscal policy is more effective in a fixed exchange rate regime or a currency union than in a flexible exchange rate regime. In this paper we revisit the theoretical foundations of the conventional wisdom on the relative ...

Durante los últimos años la economía chilena ha sufrido shocks importantes que han implicado un gran desafío para la conducción de la política monetaria. El fin del súper ciclo de las materias primas y condiciones financieras internacionales más estrechas junto con una caída importante en los niveles ...

There is no consensus about the economic implications of real exchange rate (RER) misalignments. Some authors argue that keeping the real exchange rate away from its equilibrium level creates distortions in the relative prices of tradable and nontradable goods generating misleading signals to economic ...

Policies that distort domestic saving decisions have general equilibrium effects on trade flows and the real exchange rate. In particular increasing domestic savings keeps the real exchange rate undervalued depressing imports and increasing exports. However there are important differences between ...

The question of whether capital controls should be part of the tool box for policymakers to deal with capital flows has become one of the central issues in the international economic policy debate. It was one of the key policy issues in the G20 under the French Presidency in 2011 and it has been covered ...

This paper evaluates the capacity of emerging market economies (EMEs) to moderate the domestic impact of global financial and monetary forces through their own monetary policies. I present the case that those EMEs able to exploit a flexible exchange rate are far better positioned than those that devote ...

Inflation targeting needs exchange rate flexibility. If the policy interest rate is geared to achieving the inflation target the central bank must be willing to accept the resulting exchange rate. Simply put if the central bank has both an inflation target and an exchange rate target the private sector ...