Chile’s fiscal rule as social insurance
Well before the Great Recession of 2009 put fiscal policy debates in the front burner commodity-exporting countries had to deal with important fiscal policy dilemmas stemming from revenue volatility and eventual depletion. Chilean policymakers have been at the forefront in this area since adopting a...
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| Autores principales: | , , |
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| Formato: | Artículo |
| Lenguaje: | eng |
| Publicado: |
Banco Central de Chile
2019
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/20.500.12580/3791 |
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| Sumario: | Well before the Great Recession of 2009 put fiscal policy debates in the front burner commodity-exporting countries had to deal with important fiscal policy dilemmas stemming from revenue volatility and eventual depletion. Chilean policymakers have been at the forefront in this area since adopting a fiscal rule to guide government spending decisions a decade ago. This so-called structural balance rule (SBR) incorporates fluctuations in copper prices—the main source of volatility in fiscal revenues—and was instrumental in saving a large part of the windfall during the commodity boom of 2005–08. When the country went into recession in 2009 however the rule was essentially abandoned as authorities implemented a fiscal expansion beyond that suggested by the SBR. |
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