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The business cycle and copper mining in Chile

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  • Fuentes H., Fernando
  • García, Carlos J.

Abstract

This article “endogenizes” the copper supply, incorporating demand for mining-sector inputs represented by other goods in the economy (specifically, intermediate goods) and also energy into a dynamic stochastic general equilibrium (DSGE) model for a sample of the 2003-2013 period. The model estimation reveals that a rise of 1% in the copper price leads to a 0.16% increase in gross domestic product (GDP) over five years. The main contribution of the study is to show that, if the mining sector is treated as integrated into the rest of the economy rather than being assumed to be an enclave, as it usually is, the effects of the copper price on the Chilean economy at least double.

Suggested Citation

  • Fuentes H., Fernando & García, Carlos J., 2016. "The business cycle and copper mining in Chile," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    • Handle: RePEc:ecr:col070:40429
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    2. Becerra, Miguel & Jerez, Alejandro & Garcés, Hugo O. & Demarco, Rodrigo, 2022. "Copper price: A brief analysis of China’s impact over its short-term forecasting," Resources Policy, Elsevier, vol. 75(C).

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