Competitiveness and the Evolution of the Real Exchange Rate in Chile
April 1, 1998
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Summary
This paper reviews the evolution of certain price and nonprice competitiveness indicators in Chile and concludes that the pecuniary loss of competitiveness associated with the appreciation of the peso since the late 1980s has been broadly offset by productivity gains and adjustments in factor intensity, particularly in the manufacturing sector. However, there may be limited room for further advances from that point, which gives new prominence to certain policy issues such as structural reforms to increase productivity, a reassessment of the tax treatment of the mining sector, and a rebalancing of the macroeconomic policy mix to dampen speculative capital inflows.
Subject: Competition, Currencies, Exchange rates, Exports, Financial markets, Foreign exchange, International trade, Money, Production, Productivity, Real effective exchange rates, Real exchange rates
Keywords: appreciation, appreciation effect, Balassa effect, Caribbean, Chile, Competition, competitiveness, competitiveness indicator, Currencies, decreasing returns, exchange rate, Exchange rates, export market shares, export share, Exports, factor endowment, market share, productivity, productivity gain, Real effective exchange rates, Real exchange rates, RER appreciation, unit Labor, WP
Pages:
27
Volume:
1998
DOI:
Issue:
058
Series:
Working Paper No. 1998/058
Stock No:
WPIEA0581998
ISBN:
9781451847833
ISSN:
1018-5941
