This paper analyzes the short-run effects of tariffs on Canadian trade volumes and prices. I use shifts in government trade policies, from protective to retaliatory tariffs, to identify trade elasticities. This serves for the construction of a novel instrument to estimate these elasticities at the variety level. I use 2018 Canadian retaliatory tariffs on industries distinct from those protected by the US, as an identification strategy in the IV context. The estimation for the elasticity of demand for imports is -5.2, which is twice as large as those typically reported in the literature. Given there is selection in the tariff policy design, this is a local treatment effect towards the upper tail of the elasticity distribution. On the other hand, retaliatory tariffs on industries protected by the US, are employed to obtain an estimate for the lower end of the distribution. Together, these set bounds on the average elasticity, which lies between -1.9 and -5.2.

This paper estimates the dynamic effects of import tariffs on Canadian macroeconomic aggregates. The identification of an exogenous shock requires tackling with the problem of simultaneity, that otherwise, if not taken into account, induces attenuation bias in the estimations. To deal with this, we use a database of temporary trade barriers to construct a measure of retaliatory tariffs. Using these, as an instrument for import tariff shocks in a Proxy-SVAR, we are able to identify the effect of exogenous shock. The results on GDP indicate that import tariffs are highly contractionary and that most of the effect is experienced during the first quarters after the shock. These remain robust to a series of alternative specifications and are larger than those obtained in the standard literature.

This paper assess a new feature of carbon taxes in small open economies specializing in the export of a single commodity. This is, the ability to reduce the volatility of the real exchange rate in the Chilean economy. This is made trough the lens of a DSGE model that features an externality that affects the economy GDP. This originates from the burning process of fossil fuels, used for energy generation. We assume that this externality is the driver of climate change and that the government, seeking to internalize these damages, levies a Pigouvian tax in the energy sector. A key aspect of the tax is that it is optimal, as it accounts for the social cost of carbon. Under further assumptions, it can be expressed as a fraction of GDP, depending only on exogenous parameters: the carbon cycle depreciation structure parameters, the expected damages in GDP and the discount factor. The results shows that the tax: (i) cuts emissions by roughly 8% and increases the energy price by 11%, (ii) is a welfare improving policy and finally, (iii) reduces the real exchange rate variance by 1.8%. The stabilization of this variable is robust to the shock specification under assessment. In effect, when the economy is exposed to single and multiple copper price shocks, or multiple mixed shocks, the carbon tax helps to reduce the real exchange rate volatility by an amount ranging between 1.8% and 2.2%.

This article puts forward a methodology to estimate an stress testing for the non-financial corporate sector in Chile. This is based on a detailed characterization of the financial debt of firms, using statistical appendices compiled by the Superintendence of Securities and Insurance (SVS), which were validated using administrative records from the Superintendence of Banks and Financial Institutions (SBIF) and the Central Bank of Chile (BCCh).

We analyze a dynamic stochastic general equilibrium model which includes a negative externality that arises from fossil fuels burning. The carbon released to the atmosphere by electricity producers is the main driver of climate change. We adapt the optimal tax derived by Golosov et al. (2011) to a small open economy to force polluters to internalize their damages. The results show that the tax benefits outweigh their costs; yet welfare gains seem to be marginal under plausible parameters. We calculate the optimal carbon tax for Chile and the tax effectiveness achieved, which is around 10 percent. The results remain robust to variations in the utility function, changes in parameters that determine the externality and alternative degrees of commitment to reduce emissions.

This article presents an historical comparison of the results of companies reporting to the Superintendence of Securities and Insurance (SVS). This comparison covers periods during which the country was exposed to different economic cycles, spanning from 1994 to 2013. It analyzes in detail the Asian crisis and its subsequent recovery, the subprime crisis, and finally, the current situation.

We analyze a dynamic stochastic general equilibrium model which includes a negative externality that arises from fossil fuels burning. The carbon released to the atmosphere by electricity producers is the main driver of climate change. We adapt the optimal tax derived by Golosov et al. (2011) to a small open economy to force polluters to internalize their damages. The results show that the tax benefits outweigh their costs; yet welfare gains seem to be marginal under plausible parameters. We calculate the optimal carbon tax for Chile and the tax effectiveness achieved, which is around 10 percent. The results remain robust to variations in the utility function, changes in parameters that determine the externality and alternative degrees of commitment to reduce emissions.