## Mining Spillovers in Chile

_IMF Working Papers, July 31, 2017_

## Source details

**Canonical URL:** [Mining Spillovers in Chile](https://www.imf.org/en/publications/wp/issues/2017/07/31/mining-spillovers-in-chile-45143)

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## Bibliographic details
- Authors: Esther Perez Ruiz
- Published: July 31, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484312698.001

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### Summary
- Chile’s small open economy can be represented by three stylized sectors: a commodity sector, a non-commodity tradable sector, and a non-tradable sector.
- The paper estimates the effect of copper price shocks on mining, manufacturing, and construction—each embodying one of the sector types.
- Empirical findings show positive spillovers from mining to manufacturing and construction.
- The estimated size of the spillovers is modest, raising questions about the potential for mining to be better integrated with the rest of the economy.

### Empirical focus and methodology
- Sectoral focus: mining (commodity sector), manufacturing (non-commodity tradable sector), construction (non-tradable sector).
- Shock analyzed: copper price shocks (world copper price).
- Outcome variables: sectoral production and output spillovers; real effective exchange rates and prices are relevant themes.

### Key findings
- Positive spillovers from mining to:
  - Manufacturing (non-commodity tradable sector).
  - Construction (non-tradable sector).
- Magnitude: described as modest (no additional numeric magnitudes provided on the page).
- Related considerations highlighted: Dutch disease, expenditure switching, exchange rate effects, costs of production, capital cost.

### Policy implications and questions raised
- The modest size of observed spillovers implies limited integration of mining with the broader economy.
- Policy-relevant question: potential for mining to be better integrated with the rest of the economy to amplify spillovers.
- Areas relevant for policy analysis: expenditure switching effects, exchange rate dynamics (real effective exchange rates), and structural policies to link mining with manufacturing and construction.

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## Content in this bundle

- **Mining Spillovers in Chile, WP/17/177, July 2017**
  - [Mining Spillovers in Chile, WP/17/177, July 2017 (Markdown version)](/-/media/files/publications/wp/2017/wp17177.pdf.md){rel="alternate" type="text/markdown"}
  - [Mining Spillovers in Chile, WP/17/177, July 2017 (PDF)](/-/media/files/publications/wp/2017/wp17177.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2017/07/31/mining-spillovers-in-chile-45143_