Chilean Macroeconomic and Financial Outlook: The Emerging Markets Policy Response to the Tsunami of Capital Flows

The tsunami of capital inflows affecting emerging market economies these days is an important challenge for their macroeconomic stability. The surge is generating real currency appreciation, overheating and inflationary pressures, and, in some cases, a widening current account deficit. The depth and duration of the external financing shock is putting macroeconomic stability at risk and endangering the survival and competitiveness of non commodity traded goods sectors, particularly in agriculture and manufacturing.  

Chilean Macroeconomic and Financial Outlook – LAC Development and the Bicentennial

In September Chile celebrated its 200th anniversary since independence, joining several other Latin American countries (LAC) that during this year are doing the same. Two centuries have elapsed since the LAC emancipated from Spain, a bit less in the case of Brazil’s emancipation from Portugal, and despite all the progress made, they are far from achieving the standard of living of their former European colonizers. Chile and other few LACs are getting closer and will likely attain a standard of living of a developed country during the next century.