publications

2024

1. Unsupervised ML

   

   Independent fiscal institutions: A typology of OECD institutions and a roadmap for Latin America

   OECD Economics Department Working Papers, Paris, Jan 2024

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   The paper reviews the diverse experience of OECD countries in establishing and running independent fiscal institutions, offering insights that could be useful for Latin American countries seeking to set-up and strengthen those institutions in the region. Through cluster analysis, we identify different types of OECD independent fiscal institutions and draw practical lessons from cases studies. We also identify key features that could serve as a road map for Latin American countries in their efforts to establish or enhance independent fiscal institutions.

2. Time Series

   

   Dynamics of service inflation

   D; Wlasiuk JM Bajraj G; Rodriguez, and G Zelpo

   Minutes Cited in the Monetary Policy Report, Santiago, Jun 2024

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   This analysis highlights the unusual persistence and global synchronization of services inflation following the pandemic and the war in Ukraine, contrasting with the more contained trends in goods, food, and energy inflation. Dynamic factor models indicate that the global factor explaining services inflation variance surged from 15% pre-pandemic to 50% post-pandemic. This phenomenon stems from synchronized shocks and policy responses, with services prices lagging behind overall inflation but now recovering. Projections suggest services inflation may return to pre-pandemic levels by mid-2025, although risks remain due to heightened persistence in high-inflation periods and country-specific factors such as fiscal policies and geopolitical events.

3. Commodity Prices

   

   Copper Prices

   Minutes Cited in the Monetary Policy Report, Santiago, Jun 2024

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   The recent rise in copper prices, driven by supply constraints and robust demand fueled by the global energy transition, has prompted a revision in the projected price for 2024-2026 from 3.85 to 4.30 per pound in the central IPoM scenario. While part of this increase is linked to transitory factors, such as speculative activity and risk appetite, over half is expected to persist due to structural demand shifts and geopolitical influences. This sustained rise is anticipated to stimulate mining investment and related sectors, improve terms of trade, and contribute to peso appreciation, impacting domestic demand and inflation. The effects on monetary policy and economic dynamics will continue to be assessed.

4. Supervised ML

   

   Risks to International inflation convergence

   MT; Pustilnik, and Wlasiuk JM

   Minutes Cited in the Monetary Policy Report, Santiago, Mar 2024

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   The decline in global inflation since mid-2022 has been driven primarily by falling goods prices, aided by normalized supply chains, lower transportation costs, and reduced commodity prices. However, services inflation remains high, and recent reversals in deflationary pressures—such as rising transportation costs and an uncertain energy outlook—pose risks. China’s macroeconomic slowdown has contributed to disinflation, but this effect may diminish if its consumption and industrial output stabilize. These factors add uncertainty to the pace of global inflation convergence, with supply-side contributions to disinflation waning and new pressures emerging.

2022

1. Supervised ML

   

   Recovery of the Labor Force After the Pandemic: International Comparison

   M; Bertinatto, and Rodriguez D

   Minutes Cited in the Monetary Policy Report, Santiago, Sep 2022

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   Post-pandemic labor force participation recovery has varied across countries due to factors like mobility restrictions, fear of contagion, economic recovery pace, and fiscal policies. Stricter quarantines and high fatalities initially reduced participation, especially in informal economies, while fiscal aid programs, particularly those not tied to employment retention, delayed recovery by reducing incentives to seek jobs. In some cases, measures like pension fund withdrawals amplified these effects by increasing household liquidity. Most economies have seen near-full recovery, limiting long-term growth impacts; however, in the U.S., significant early retirements have constrained labor supply, creating imbalances that may hinder inflationary convergence.

2021

1. Supervised ML

   

   Recovery of Global Investment During the Pandemic

   Minutes Cited in the Monetary Policy Report, Santiago, Sep 2021

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   Following a sharp decline at the start of the pandemic, global investment has rapidly rebounded, returning to pre-crisis levels in most economies. This recovery is attributed to favorable international financial conditions, strong expansionary monetary policies, and fiscal measures that provided credit to businesses, preventing mass bankruptcies and supporting investment. As restrictions lifted and businesses resumed operations, many companies resumed delayed investment plans, further aided by a strong real estate market. Developed economies are expected to maintain positive investment growth, supported by fiscal packages and increased demand for housing. However, emerging economies face risks such as financial instability, inflation, and increased corporate debt, which could hinder their investment recovery. Despite these risks, the swift investment recovery indicates that the long-term effects of the pandemic on global activity will likely be less severe than in past crises. The rapid rebound in investment has been particularly notable in construction, machinery, and equipment sectors. Moving forward, while developed economies are poised for continued investment growth, emerging economies may face challenges due to financial and political uncertainties, along with slower pandemic recovery.

2020

1. Supervised ML

   

   Economic Impact of Restrictions: Panel Estimates

   Minutes Cited in the Monetary Policy Report, Santiago, Dic 2020

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   This document discusses the global impact of the COVID-19 pandemic, focusing on vaccine development, the resurgence of outbreaks, and their economic implications. It highlights the successful development of vaccines with high efficacy rates and the anticipated global vaccination rollout in 2021, which is expected to lead to herd immunity and the easing of restrictions by 2022. The document also addresses the economic challenges posed by recent outbreaks in Europe and the U.S., noting that while the impact on mobility and activity is less severe than earlier in the pandemic, certain sectors like tourism and hospitality remain vulnerable. Overall, the findings suggests that while the pandemic will continue to shape global economic activity, the economic recovery will be more moderate and gradual, with vaccines playing a critical role in restoring normalcy by 2022.