Copper and the Chilean Economy, 1960–98
April 1, 1999
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Summary
The paper concludes that world copper prices play an important role in short-term fluctuations and probably influence long-term growth of the Chilean economy. While many mechanisms may be at work, investment seems to play a major role. In a copper price boom, the higher copper price and associated capital inflows create upward pressure on the real exchange rate. The appreciation of the Chilean peso during the first part of the copper cycle contributes to lower inflation, which could partly explain why real wages grow more rapidly in this part of the cycle.
Subject: Business cycles, Commodities, Copper, Economic growth, Economic sectors, Inflation, Metal prices, Mining sector, Prices
Keywords: Asia and Pacific, Business cycles, Chile, Chilean business cycle, Chilean economy, Copper, copper cycle, copper prices, copper sector, Europe, exchange rate, Inflation, investment, Metal prices, Mining sector, nominal exchange rate, price, price change, price of copper, price upturn, price variable, WP
Pages:
33
Volume:
1999
DOI:
Issue:
057
Series:
Working Paper No. 1999/057
Stock No:
WPIEA0571999
ISBN:
9781451847758
ISSN:
1018-5941
