End of the Supercycle and Growth of Commodity Producers: The Case of Chile

November 23, 2015

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper estimates the effect of copper prices on Chile’s growth at various time horizons. We find that a price decline is likely to have a durable (although not permanent) effect on GDP growth: while the impact is the strongest in the first 3 years after the shock, the transition towards the new lower steady-state GDP level generally takes 5–10 years. From a production function perspective, the GDP growth slowdown is mainly driven by lower capital accumulation.

Subject: Commodities, Commodity price shocks, Commodity prices, Metal prices, Prices

Keywords: Chile, Commodities, commodity, Commodity price shocks, Commodity prices, Copper, copper price fluctuation, copper price outlook, copper price series, copper price Supercycle, effect of commodity price shock, GDP deceleration, Global, Growth, macroeconomic effect of commodity price shock, Metal prices, negative commodity price shock, nominal copper price, price, price series, price shock, price volatility model, volatility model, WP

Pages:
27
Volume:
2015
DOI:
https://doi.org/10.5089/9781513531557.001
Issue:
242
Series:
Working Paper No. 2015/242
Stock No:
WPIEA2015242
ISBN:
9781513531557
ISSN:
1018-5941

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