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Compensación Inflacionaria en Chile

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  • Rómulo Chumacero
  • Luis Opazo

Abstract

This paper provides a simple analytical framework to decompose breakeven inflation. Estimates suggest that one and two years ahead, breakeven inflations are strongly linked to inflation expectations, and that their recent values are not necessarily inconsistent with complying with the inflation target. In the case of breakeven inflation one year ahead (1-1), figures like those of March-2008 require premiums (e.g., liquidity premiums) in the order of 100 bp to be consistent with an inflation rate of 3% two years ahead. While breakeven inflation in longer horizons, (5-5) is high, the gap between the 5-5 breakeven inflation and the target is small compared to that of other economies.

Suggested Citation

  • Rómulo Chumacero & Luis Opazo, 2008. "Compensación Inflacionaria en Chile," Working Papers Central Bank of Chile 468, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:468
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_468.pdf
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    References listed on IDEAS

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    1. Schmidt-Hebbel, Klaus & Tapia, Matias, 2002. "Inflation targeting in Chile," The North American Journal of Economics and Finance, Elsevier, vol. 13(2), pages 125-146, August.
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    Cited by:

    1. Camilo Beyzaga E. & Luis Ceballos S., 2017. "Compensación inflacionaria y premios por riesgo: evidencia para Chile," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 20(2), pages 150-165, August.
    2. Juan Andrés Espinosa-Torres & Luis Fernando Melo-Velandia & José Fernando Moreno-Gutiérrez, 2017. "Expectativas de inflación, prima de riesgo inflacionario y prima de liquidez: una descomposición del break-even inflation para los bonos del Gobierno colombiano," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 78, February.
    3. Matías Bernier B & Felipe Alarcón G. ., 2009. "Diferencias en Medidas de Compensación Inflacionaria y Swap Spread," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 12(1), pages 105-116, April.
    4. Luis Ceballos & Alberto Naudon & Damián Romero, 2016. "Nominal term structure and term premia: evidence from Chile," Applied Economics, Taylor & Francis Journals, vol. 48(29), pages 2721-2735, June.

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