The Chilean Output Gap

15 Pages Posted: 1 Feb 2011

See all articles by Leandro Medina

Leandro Medina

George Washington University - Department of Economics; International Monetary Fund (IMF) - Western Hemisphere Department

Nicolás E. Magud

International Monetary Fund (IMF)

Date Written: January 2011

Abstract

This paper estimates the potential output (and the output gap) in Chile using several different methodologies. After a structural brake in 1998, the average growth rate of potential output in Chile declined from over 7 percent to 3-4 percent in the aggregate economy, but to less than 2 percent in the natural resource sector. The contributions to aggregate potential output growth of the natural resource sector and the non-natural resource sector are estimated, finding that the contribution to growth of the natural resource sector is non-linear-increasing during the 1990s, declining during the 2000s, and turning negative in the mid-2000s-despite the monotonic decrease in the share of natural resource output in aggregate output.

Keywords: Chile, Economic growth, Economic models, Employment, Natural resources, Production

Suggested Citation

Medina, Leandro and Magud, Nicolas E., The Chilean Output Gap (January 2011). IMF Working Paper No. 11/2, Available at SSRN: https://ssrn.com/abstract=1751412

Leandro Medina (Contact Author)

George Washington University - Department of Economics ( email )

Monroe Hall, Suite 340
2115 G Street, NW
Washington, DC 20052
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International Monetary Fund (IMF) - Western Hemisphere Department

700 19th Street NW
Washington, DC 20431
United States

Nicolas E. Magud

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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