Estimating Potential Output in Chile: A Multivariate Filter for Mining and Non-Mining Sectors

Author/Editor:

Patrick Blagrave ; Marika Santoro

Publication Date:

October 14, 2016

Electronic Access:

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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:

Using a multivariate filter, we estimate potential growth rates in Chile’s mining and non-mining sectors. Estimates for the mining sector incorporate information on copper prices, whereas estimates for non-mining reflect information on inflation and unemployment rates. To better understand the drivers of potential growth, we decompose estimates into capital, labor (adjusted for human-capital and hours worked), and total-factor productivity using a production-function. Our estimates of potential output in Chile suggest that an important part of the recent growth slowdown has been structural, with potential-output growth slowing to 2½ percent in recent years, although it plausibly could be higher in the medium-term.

Series:

Working Paper No. 2016/201

Subject:

Economic sectors Metal prices Mining sector Output gap Potential output Prices Production Total factor productivity

English

Publication Date:

October 14, 2016

ISBN/ISSN:

9781475544923/1018-5941

Stock No:

WPIEA2016201

Pages:

32

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