What was the Long Term Growth in the Chilean Economy? A Formal Answer for an Old Question

Abstract:     
The objective of the present study is to estimate the economy growth rate in the context of full use of the productive resources. Time series univariete models, including a deterministic tendency (with mean breaks), and a space-state model that considers a stochastic tendency and a cyclic component, estimated by Kalman’s filter were used. The cyclic component is calculated with and without regime changes (Markov-switching models), according to Friedman’s idea-plucking model. The results indicate that the Chilean economy potential growth rate would be greater than 4% annually, accompanied by economic asymmetric cycles.

Note: Downloadable document is in Spanish.

Number of Pages in PDF File: 25

Keywords: economy, cycles, growth tendency, Kalman’s filter, Chile

JEL Classification: C22, E32, N36, O54

Accepted Paper Series