Encuentro Anual SECHI 2026

August 26, 2026
Time	Location	Event
14:00 to 18:00		Encuentro Doctoral: Workshop inicial
August 27, 2026
Time	Location	Event
08:30 to 09:00		Registro
09:00 to 11:00	see below	Sesiones paralelas
11:00 to 11:30		Coffee break
11:30 to 13:00		Clase Magistral Juan Escobar
13:00 to 14:00		Almuerzo
13:00 to 14:00		Almuerzo Red de Economistas de Chile (REM-Chile)
13:00 to 16:30		Posters
14:00 to 16:00	see below	Sesiones paralelas
16:00 to 16:30		Coffee break
16:30 to 18:00		Keynote: Julieta Caunedo
19:00 to 21:30		Cóctel (Quinta la Chanchá)
August 28, 2026
Time	Location	Event
09:00 to 11:00		Sesión BID: Presentación Libro "El sistema bancario en el Cono Sur: Estado de situación, logros y desafíos"
09:00 to 11:00	see below	Sesiones paralelas
11:00 to 11:30		Coffee break
11:30 to 13:00		Keynote Speaker: Gianmarco León
13:00 to 14:00		Almuerzo
13:00 to 14:00		Asamblea de Socios Sechi
14:00 to 16:00	see below	Sesiones paralelas
16:00 to 16:30		Brindis de clausura

Summary of All Sessions
Click here for an index of all participants

#	Date/Time	JEL	Title/Location	Papers
1	August 26, 2026 14:00-18:00		Juan Escobar: Mechanism design     Location: UTalca - FEN	0
2	August 26, 2026 14:00-18:00		Pablo Neudorfer: Finanzas Climáticas     Location: UTalca - FEN	0
3	August 26, 2026 14:00-18:00		Encuentro y conversatorio con los keynotes: Julieta Caunedo y Gianmarco León     Location: UTalca - FEN	0
4	August 27, 2026 9:00-11:00		Natural Resources & Commodities     Location: UCM - F305	4
5	August 27, 2026 9:00-11:00		Macroeconomics: Market Structure and Economic Inequality     Location: UCM - F309	4
6	August 27, 2026 9:00-11:00		Economics of Education: Schools     Location: UCM - F304	4
7	August 27, 2026 9:00-11:00		Labor Markets, Gender and the Household     Location: UCM - F308	3
8	August 27, 2026 9:00-11:00		Small Businesses and Productive Development     Location: UCM - F303	4
9	August 27, 2026 9:00-11:00		Sesión organizada: Banco Central     Location: UCM - F307	4
10	August 27, 2026 9:00-11:00		Pensions     Location: UCM - F302	4
11	August 27, 2026 13:00-16:30		Posters	6
12	August 27, 2026 14:00-16:00		Encuentro Doctoral, Sesión 1     Location: UCM - F305	4
13	August 27, 2026 14:00-16:00		Encuentro Doctoral, Sesión 2     Location: UCM - F309	4
14	August 27, 2026 14:00-16:00		Urban Economics     Location: UCM - F304	4
15	August 27, 2026 14:00-16:00		Environmental Economics     Location: UCM - F308	4
16	August 27, 2026 14:00-16:00		Sesión organizada: Movilidad intergeneracional e igualdad de oportunidades     Location: UCM - F303	3
17	August 27, 2026 14:00-16:00		Financial Frictions & External Shocks     Location: UCM - F307	3
18	August 27, 2026 14:00-16:00		Monetary Policy & Macro Dynamics     Location: UCM - F302	3
19	August 28, 2026 9:00-11:00		Sesión organizada: Climate Transition Risk: Asset Prices, Market Responses, and Macroeconomic Trade-Offs     Location: UTalca - Auditorio FEN	4
20	August 28, 2026 9:00-11:00		Economics of Education: Human Capital     Location: UTalca - FEN1	3
21	August 28, 2026 9:00-11:00		Health Economics     Location: UTalca - FEN2	4
22	August 28, 2026 9:00-11:00		Labor Markets, Technology and Productivity     Location: UTalca - 805	4
23	August 28, 2026 9:00-11:00		Fiscal Policy     Location: UTalca - 806	3
24	August 28, 2026 9:00-11:00		Open Economy Macroeconomics     Location: UTalca - 807	3
25	August 28, 2026 9:00-11:00		Econometrics     Location: UTalca - Salon Ejecutivo	4
26	August 28, 2026 14:00-16:00		Labor Markets, Regulation and Informality     Location: UTalca - FEN1	4
27	August 28, 2026 14:00-16:00		Inflation & Expectations     Location: UTalca - FEN2	4
28	August 28, 2026 14:00-16:00		Banking & Credit Markets     Location: UTalca - 806	4
29	August 28, 2026 14:00-16:00		Sesión organizada: Commodity Markets and Expectations     Location: UTalca - SALON EJECUTIVO	3
30	August 28, 2026 14:00-16:00		Industrial Organization & Markets     Location: UTalca - 805	4
31	August 28, 2026 14:00-16:00		Political Economy and Development     Location: UTalca - FEN3	4
32	August 28, 2026 14:00-16:00		Microeconomics & Game Theory     Location: UTalca - 807	4

 

32 sessions, 110 papers, and 0 presentations with no associated papers

Encuentro Anual SECHI 2026
Detailed List of Sessions

                                                                

Session 1: Juan Escobar: Mechanism design August 26, 2026 14:00 to 18:00 Location: UTalca - FEN
Session 2: Pablo Neudorfer: Finanzas Climáticas August 26, 2026 14:00 to 18:00 Location: UTalca - FEN
Session 3: Encuentro y conversatorio con los keynotes: Julieta Caunedo y Gianmarco León August 26, 2026 14:00 to 18:00 Location: UTalca - FEN
Session 4: Natural Resources & Commodities August 27, 2026 9:00 to 11:00 Location: UCM - F305
Congested CapEx in Commodity Investment Booms: Cost overruns and Project Delays under Synchronized entry Abstract This paper studies cost overruns and project delays in the context of large capital-intensive capital expenditures (CapEx) in mining construction booms, where many firms may enter at the same time, generating congestion in CapEx markets due to non-tradable inputs and specialized Engineering, Procurement and Construction (EPC). We approach this problem in a discrete-time real option game in which firms choose investment timing under commodity price uncertainty, and investment unit costs rise with aggregate synchronized entry. For various organizational reasons, some firms may fail to internalize the impact of aggregate investment on future execution costs. Firms that neglect congestion postpone investment excessively, leading to underinvestment, followed by clustered entry and cost overruns. In contrast, firms that internalize congestion may invest preemptively and smooth aggregate investment. We test the model using project-level data from Chilean mining in the last two decades. Projects launched in more congested environments are more likely to experience cost overruns and/or delays, and CapEx revisions occur primarily after construction begins rather than before commitment. Our results suggest that endogenous execution costs and sticky capital budgeting are central to understanding inefficient investment timing and systematic cost overruns in large projects. We discuss various policies and organizational practices that might smooth the investment cycle.
By Rodrigo Wagner; Business School UAI, Chile & Growth Lab CID
Presented by: Rodrigo Wagner, Business School UAI, Chile & Growth Lab CID
Carbon Pricing, Oil Markets, and Inflation Expectations: A Mediation Quantile Error Correction Approach Abstract This study examines whether carbon pricing affects market-based inflation expectations directly and indirectly through oil prices. Focusing on the European Union Emissions Trading System (EU ETS), we analyze how this transmission varies across time horizons, quantiles, and European countries. Carbon pricing is increasingly central to climate policy, but its macroeconomic implications remain debated, especially regarding its potential contribution to green inflation. While previous studies have mainly focused on direct cost pass-through to realized inflation, less is known about whether carbon prices affect inflation expectations through energy-market channels and whether these effects differ under alternative market conditions. To address this issue, we propose the Mediation Quantile Error Correction Model (Mq-ECM), which combines mediation analysis with a quantile error-correction structure. This framework allows us to identify direct and indirect channels, distinguish between short- and long-run dynamics, and capture state-dependent responses across the distribution of inflation expectations. Using daily data and one-year inflation swap rates as market-based proxies for inflation expectations, we examine the transmission of EU ETS prices through oil prices across Europe, Belgium, France, Germany, Italy, and Spain. The results show that short-run effects are mixed and country-specific, suggesting that the immediate inflationary consequences of carbon pricing depend on national conditions and market states. In contrast, long-run effects are more systematic and become positive in upper quantiles, indicating that carbon pricing is more likely to raise inflation expectations during periods of elevated market stress or high inflationary pressure. Oil prices mediate part of this transmission, confirming that fossil fuel markets remain an important channel through which carbon price shocks affect inflation expectations. Overall, the findings suggest that green inflation should be understood as a dynamic, heterogeneous, and state-dependent process rather than as a uniform direct pass-through mechanism. These results highlight the need for closer coordination between climate, monetary, and energy policy to preserve price stability while advancing decarbonization objectives.
By Diego Vergara; Universidad de Talca
Presented by: Diego Vergara, Universidad de Talca
Climate Change Concerns and Common Volatility in Commodity Markets Abstract We study whether unanticipated shocks to climate change media coverage generate common volatility movements in commodity markets. Using daily prices of nineteen commodities from the S&P GSCI between January 2002 and July 2025, we estimate the common volatility (COVOL) factor of Engle and Campos-Martins (2023) at the aggregate level and separately for three sub-indices: Energy, Metals, and Agricultural & Livestock. We then project the resulting COVOL series onto variance shocksto the Media Climate Change Concerns (MCCC) index of Ardia et al. (2023) using the local projection framework of Jordà (2005) with the lag-augmented inference of Montiel Olea and Plagborg-Møller (2021). Contrary to our prior hypothesis derived from the literature, the response of energy commodity COVOL to climate-news shocks is statistically indistinguishable from zero across all horizons and specifications. We instead find a robust negative and statistically significant response of the aggregate and Agricultural & Livestock COVOL, both contemporaneously and at horizons of nine to twelve business days
By Sebastián López; Universidad de Talca
Presented by: Sebastián López, Universidad de Talca
Climate Risk Premium in Water Markets: nsights from a Policy Intervention Abstract We study how markets price climate and regulatory risk using transaction-level data on tradable water property rights (WPRs) in Chile. Since 2008, Water Scarcity Decrees (WSDs) have enabled water reallocation under adverse hydrological conditions. To identify policy-driven variation, we estimate a threshold rule using a Random Forest trained on hydrological indicators to construct an instrument for WSD exposure. Instrumental variable estimates show that an additional decree increases WPR prices by 9.7\%. Quantile IV results reveal strong heterogeneity, with positive effects at the lower end and negative effects at the upper tail, consistent with hydrological and regulatory risks being priced.
By Evangelina Dardati; Universidad de Chile    Jorge Sabat; Universidad Andres Bello
Presented by: Jorge Sabat, Universidad Andres Bello
Session 5: Macroeconomics: Market Structure and Economic Inequality August 27, 2026 9:00 to 11:00 Location: UCM - F309
Market power, ownership concentration and income inequality Abstract We quantify the distributional effects of market power by decomposing capital income into competitive returns and market-power rents and assigning these components to ultimate individual owners. Using matched firm-level and taxpayer-level administrative data for Chile from 2008 to 2016, we estimate firm-level markups and trace monopoly rents through ownership networks. Capital income is highly concentrated, but competitive returns are more skewed than market-power rents because very large firms exhibit lower markups. As a result, market-power rents account for a smaller share of income at the very top of the distribution. Inequality decompositions imply that reductions in market power lower inequality despite increases in competitive returns, as the associated rise in the labor share dominates. Our results provide new empirical evidence on how ownership structure mediates the link between market power and inequality.
By Alejandro Micco; University of Chile    Andrea Repetto; Universidad Adolfo Ibañez    Patricio Toro; Central Bank of Chile
Presented by: Alejandro Micco, University of Chile
Divide and Conquer: Bargaining Scope and the Distribution of Rents Abstract This paper studies how legal firm boundaries that constrain the scope of collective bargaining affect wages, rent sharing, and productivity. We analyze a 2014 Chilean labor-code reform that prevented corporations from fragmenting their workforce into smaller legal entities, thereby expanding the potential size of bargaining units. Using population-wide matched employer-employee administrative data and a dynamic difference-indifferences design with same-industry controls, we find that average annual earnings rose by 4.7%, bottom-decile wages by 10%, and within-firm wage dispersion (standard deviation) by $520-$710 (USD), corresponding to 6-9% of its pre-reform level. Employment and firm profits did not change, while value added per worker increased. Effects are strongest in initially smaller businesses and in multi-establishment groups with co-located units, consistent with coordination-cost frictions. We develop an extensive-form model in which management chooses whether to fragment or consolidate its business, and payoffs are determined by subsequent bargaining with workers. Under consolidation, workers can form an encompassing union that worsens management's outside option during a strike, while the firm internalizes cross-unit complementarities in production. The model predicts higher worker effort, wages, and wage dispersion under consolidation, matching our empirical results and rationalizing their heterogeneity. Overall, the analysis shows that expanding bargaining-unit scope can be efficiency-consistent: coordination gains offset rent reallocation, allowing efficiency and equity to coexist within firms.
By Jose Pascual; Cornerstone    Estefano Rubio; Universidad Adolfo Ibañez
Presented by: Estefano Rubio, Universidad Adolfo Ibañez
From Housing Gains to Pension Losses: Micro-Macro Integration to Reveal Wealth Inequality Dynamics in Chile Abstract This paper examines the levels and dynamics of wealth inequality in Chile between 2007 and 2021, in a context where the private pension system is mandatory and government housing policies are centered on private ownership. We focus on two major macroeconomic events: the sharp increase in housing prices following the introduction of a value-added tax on new dwellings in 2016 and the large-scale liquidation of pension assets through early withdrawals during the recent pandemic. To do so, we construct a micro–macro consistent wealth distribution by extending existing methodologies to integrate administrative pension fund balances into household wealth surveys using machine learning techniques. Our results reveal pronounced wealth concentration: the top 1% hold roughly one-third of total private wealth — levels comparable to those observed in the United States — driven by their disproportionate ownership of financial assets. By contrast, the bottom 50% hold 7–9%, primarily through housing and pension assets, shares that exceed those reported in most European countries. We also document a modest decline in wealth inequality over the period, particularly after 2016. A counterfactual analysis suggests that this decline reflects the interaction of two opposing forces: housing appreciation, which predominantly benefited the bottom 90% of households, and pension withdrawals, which reduced wealth across the distribution while relatively increasing inequality. Our findings on levels, trends, and counterfactuals are robust across alternative methodological specifications.
By Bastián Castro Nofal; Universidad de Chile    Pablo Antonio Gutierrez Cubillos; Universidad de Chile
Presented by: Bastián Castro Nofal, Universidad de Chile
The Chotikapanich Lorenz Curve and the Pareto Distribution: Theory, Estimation, and Cross-Country Evidence Abstract We study the relationship between the \citet{Chotikapanich1993} Lorenz curve and the Pareto distribution and exploit it to develop a parsimonious framework for comparative inequality analysis. Our first theoretical result shows that the Chotikapanich Lorenz curve arises from a log-uniform distribution that is the $\eta \to 0$ limit of a truncated Pareto distribution, implying that it cannot capture power-law upper tails. Building on this result, we propose a piecewise mixture Lorenz curve combining a log-uniform lower tail with a classical Pareto upper tail, parameterized by the Pareto threshold $w$, the Chotikapanich index $k$, and the Pareto exponent $\eta$. We establish identification conditions, prove consistency of a nonlinear least-squares estimator under quintile- and decile-level data, and derive the implied Gini coefficient in closed form. Estimating the model for 181 countries using the World Income Inequality Database, we find a robust negative association between the Gini coefficient and $\hat{w}$: countries where the Pareto regime begins later in the distribution exhibit lower inequality, stronger redistributive institutions, and higher threshold living standards. The model also yields harmonized estimates of $(\hat{w},\hat{\eta},\hat{k})$ and top-income shares for countries lacking tax-record data, providing a global structural parameter database for inequality analysis under limited information.
By Javier Cortés; University of British Columbia    Juan Duarte Avello; Universidad de Chile    Pablo Antonio Gutierrez Cubillos; Universidad de Chile    Marcelo Montes Muñoz; Universidad de Chile
Presented by: Pablo Antonio Gutierrez Cubillos, Universidad de Chile
Session 6: Economics of Education: Schools August 27, 2026 9:00 to 11:00 Location: UCM - F304
Effects of a teacher training reform in Guatemala Abstract This paper studies the effects of an educational reform in Guatemala that modified the training of primary teachers from three years at the secondary level (grades 10 to 12 of a diversified cycle in high school) to a combination of two years of high school and three at a university, obtaining a Bachelor of Education (B.Ed.) before being able to apply to become a primary school teacher. Exploiting the timing of the implementation and an unaffected group of students as controls, I analyse the effects at the student levels in terms of enrolment and performance during their high school years and the effects on official teachers' colleges regarding performance due to the opportunity of financial aid for their students. Results show a decrease in enrolment for primary teaching students, negative but not always significant results in math, and mixed results in reading. Besides, I also observed a change in the characteristics of aspiring educators. Official teachers' colleges experienced an initial increase in their primary teaching performance compared to other types of schools, but the effect faded after a couple of years, becoming negative.
By María Pia Iocco; Pontificia Universidad Catolica de Valparaiso
Presented by: Maria Pia Iocco, Pontificia Universidad Catolica de Valparaiso
Mitigating the Summer Slide in Reading: Experimental Evidence from an Online Tutoring Program\ Abstract This paper examines the impact of an online tutoring program designed to mitigate summer learning loss in reading proficiency. The program, implemented during the summer break, focused on enhancing decoding skills, oral language skills, and reading motivation. Key components included a book giveaway, tutor-led reading sessions, discussions about the books, and independent reading assignments—all designed to foster a supportive and enriching reading environment. We conducted a randomized evaluation with primary school students. Our findings reveal that the program significantly improved reading speed, substantially reducing summer learning loss in the treatment group compared to the control group. Additionally, the program significantly increased intrinsic motivation for reading without affecting other dimensions of motivation and beliefs. Stronger effects were observed among children with higher initial baseline outcomes and in families with more books, though not necessarily in families with more educated parents. These results suggest that cost-effective strategies, such as online tutoring, can be effectively employed outside traditional academic contexts to mitigate summer learning loss.
By Fernanda Ramirez-Espinoza; Pontificia Universidad Catolica de Chile    Susana Claro; Pontificia Universidad Católica de Chil    Francisco Gallego; PUC Chile    Marigen Narea; Pontificia Universidad Catolica de Chile    Katherine Strasser; Pontificia Universidad Catolica de Chile
Presented by: Fernanda Ramirez-Espinoza, Pontificia Universidad Catolica de Chile
Price and Market Segmentation Consequences of Targeted Vouchers Abstract We study how a large targeted voucher reform reshapes tuition-setting incentives and market segmentation in competitive education markets. We focus on Chile’s targeted voucher program, introduced in 2008, which increased per-student funding for disadvantaged pupils while prohibiting participating schools from charging top-up fees to eligible students; participation was voluntary. Using administrative data covering the universe of schools and students over 2004–2015, we exploit cross-municipality variation in pre-reform eligibility shares in an event-study design to estimate equilibrium effects on fees and program take-up. We find that the reform induces a segmented price schedule: eligible students face a mechanical drop to zero fees in participating schools, while fees faced by non-eligible students fall on average in more exposed markets, consistent with participating schools cutting posted top-up fees for higher-income families. At the same time, private- voucher schools that opt out raise fees, moving upmarket. We interpret these patterns through models of school competition with peer effects and sorting, and we provide supporting evidence from a pre-reform school choice model with peer composition that families exhibit economically meaningful willingness-to-pay to avoid low-income peers.
By Cristian Sanchez; Universidad de los Andes
Presented by: Cristian Sanchez, Universidad de los Andes
Affirmative actions in school choice Abstract We study the consequences of increasing reserved seats in school choice problems with multiple overlapping affirmative action categories under the Deferred Acceptance (DA) mechanism. While DA is known to satisfy weak responsiveness with a single reserved category, we show that this property fails in the general overlapping-categories setting: expanding the reserved seats for a category need not weakly improve any of its eligible students. Despite this impossibility, we identify two sufficient conditions under which at least one beneficiary student is weakly better off following an expansion. First, weak responsiveness is preserved when the expanding category and the general category are adjacent in the precedence order and seats are reallocated from the latter. Second, weak responsiveness holds whenever the expanding category is over-demanded by its own members, regardless of the precedence order. We also show that increasing reserved seats for a category does not guarantee a weakly larger number of eligible students assigned to that school. To establish these results, we extend the respect-for-improvements property of DA from individual to group improvements, a contribution of independent interest.
By Gianina Morales; Universidad de Chile    Adriana Piazza; University of Chile
Presented by: Gianina Morales, Universidad de Chile
Session 7: Labor Markets, Gender and the Household August 27, 2026 9:00 to 11:00 Location: UCM - F308
Beyond Wages: Trade Exposure, Job-Finding, and the Gender Gap Abstract This paper documents that trade exposure reshapes gender labor-market inequality through a margin distinct from wages: the rate at which displaced women return to formal employment. Using twenty years of Argentine administrative panel data covering 511,000 formally employed workers and a Bartik shift-share design at the province × industry × year cell, I estimate the differential effect of export exposure on log real wages and on log non-employment-spell duration. The wage interaction is null across all specifications. The spell interaction is large, negative, and robust: women's non-employment spells in highly exposed cells are roughly 10 log points shorter than in unexposed cells, closing about half of the 22-log-point baseline gender gap. Argentina's 2002-2015 export expansion concentrated in male-intensive commodity sectors, leaving too few women in directly exposed cells for the pro-competitive mechanism that drives wage convergence in the OECD and Mexican-NAFTA literature to operate. What does operate is a quantity-margin channel that mirrors the wage non-result: the same scarcity that leaves women too few in goods-tradables to drive within-firm wage compression makes them disproportionately valuable at the hiring margin when those cells become labor-tight. The wage null and the spell-shortening are two manifestations of the same structural feature. The effect concentrates in the prime-fertility 25-34 age bracket and amplifies under the 2010-2015 capital-controls regime. In commodity-exporting economies where the canonical wage-narrowing mechanism cannot operate, trade reshapes gender inequality through reemployment dynamics, not wage-setting.
By Barbara Boggiano; Universidad Alberto Hurtado
Presented by: Barbara Boggiano, Universidad Alberto Hurtado
Free Childcare and the Motherhood Penalty: Evidence from São Paulo Abstract Latin America consistently has some of the world‘s largest motherhood penalties for women, and while subsidized childcare is often advanced as a remedy, the literature on its effectiveness is scarce outside developed countries. This paper estimates the impact of a rapid expansion of public childcare on mothers’ careers in the city of S ̃ao Paulo. We leverage the precise location and timing of the expansion of childcare facilities, coupled with detailed data on the labor market and household characteristics to identify effects on mothers’ formal employment and earnings. Comparing mothers and future mothers within the same district as childcare availability changes, we find that an additional seat per child increases mothers’ formal employment by approximately 3.5 p.p. after the birth of a first child, with no effect before birth. A complementary between-district difference-in-differences design yields a rescaled effect of 6.8 p.p. (about 20% of post-birth mean). We do not detect any effect on two comparison groups: future mothers and fathers.
By Joao Garcia; Universidad de Santiago
Presented by: Joao Garcia, Universidad de Santiago
Winning the Bread and Baking it Too: Gendered Frictions in the Allocation of Home Production Abstract We document that female breadwinners do more home production than their male partners, driven by “housework” like cooking and cleaning. By comparing to same sex couples, we highlight that specialization within heterosexual households does not appear to be “gender neutral” even after accounting for average earnings differences. One possible explanation would be a large comparative advantage in housework by women, a supposition commonly used to match aggregate labor supply statistics. Using a model, we show that while comparative advantage can match some stylized facts about how couples divide housework, it fails to match others, particularly that men’s housework time is inelastic to relative household wages. Matching these facts requires some gendered wedge between the opportunity cost of housework time and its assignment within the household. We then turn to the implications for household formation. Gendered rigidities in the allocation of household tasks result in lower surplus for couples where women out-earn men, providing a microfounded reason for substantial literature showing that lower relative earning by men decreases marriage rates. We show this mechanism—allocation of housework, rather than norms about earnings—plays a role by relating marriage rates to home production allocation in US immigrants’ countries of origin.
By Kyle Hancock; University of Pennsylvania    Jeanne Lafortune; Pontificia Universidad Catolica de Chile    Corinne Low; Wharton, University of Pennsylvania
Presented by: Jeanne Lafortune, Pontificia Universidad Catolica de Chile
Session 8: Small Businesses and Productive Development August 27, 2026 9:00 to 11:00 Location: UCM - F303
Proximity, digital technology, and market accessibility: Evidence on small business resilience during crises Abstract This study examines how geographic proximity shapes small businesses’ resilience during crises by influencing market accessibility and retail channel adaptation. Using data from 2,036 small businesses in Chile during the COVID-19 pandemic, we analyze sales, firm survival, and digital transformation under mobility restrictions. We find that crises reduce sales and increase closures, but these effects are significantly weaker for businesses located closer to urban markets, reflecting higher baseline accessibility. Proximity facilitates the adoption of consumer-facing digital technologies—such as websites, social media, and online payments—which help firms maintain customer access when physical mobility is constrained. In turn, digital adoption supports the expansion of retail channels, including e-commerce and delivery services, effectively substituting for in-person travel and reconfiguring transport-mediated accessibility to markets. Overall, the findings identify a mechanism linking geography to business resilience: proximity and digital tools jointly shape accessibility and the reconfiguration of transport-mediated interactions during crises. These results highlight spatial inequalities in access and underscore the role of digital and logistics infrastructure in supporting resilient businesses.
By Patricio Valenzuela; Universidad Adolfo Ibañez
Presented by: Patricio Valenzuela, Universidad Adolfo Ibañez
Decentralized Productive Development Policies and Regional Heterogeneity in Chile Abstract This paper evaluates the impact of decentralized productive development policies in Chile, focusing on the 2015 pilot implementation of Regional Productive Development Committees in the regions of Antofagasta, Biobío, and Los Ríos. Using firm-level data for micro, small, and medium-sized enterprises over the period 2005–2022, the analysis examines the effects of the policy on sales, number of firms, and employment. To identify causal effects, the study combines two complementary empirical approaches: the Synthetic Control Method (SCM) and a Structured Additive Regression Differences-in-Differences model (STAR-DiD), which allows the estimation of distributional effects beyond conditional mean impacts. The results reveal substantial heterogeneity across regions. In Los Ríos, the intervention generated positive and statistically significant effects across all outcomes, characterized by higher central tendency and lower dispersion. In contrast, Antofagasta experienced negative and significant effects associated with declining average performance and increasing dispersion, whereas Biobío displayed mixed effects across outcomes. The evidence further suggests that differences in executed budgets, funding allocation, sectoral targeting, and implementation scale are important determinants of policy effectiveness. Overall, the findings highlight that the effects of decentralized development policies critically depend on regional implementation dynamics and institutional heterogeneity, emphasizing the importance of governance and local policy design in place-based development strategies.
By Roberto Herrera Cofré; UdeC    Gabriel Pino; Universidad Diego Portales
Presented by: Roberto Herrera Cofré, UdeC
Financial Frictions, Management and Firm Growth Abstract We study whether relaxing financial and management frictions helps high-potential small firms grow. We evaluate Impulso Chileno, a Chilean program that combines a financial transfer of \$3,500--\$5,800 USD with 30 hours of business training and eight mentoring sessions, targeting formally registered small and medium enterprises selected through a competitive multi-stage process. Using a randomized controlled trial with 500 finalists---250 treated and 250 controls---stratified by gender and region, and drawing on survey data collected nine months after the start of the intervention, we find that the program substantially increased entrepreneurial learning (39\%) and improved business practices, particularly financial planning. We find no statistically significant average effects on sales, profits, costs, or employment. There is suggestive evidence of improvements in household financial health. Future versions of this paper will incorporate administrative data from the Central Bank of Chile---tax records, unemployment insurance, civil registry, and credit registry---to study the program's longer-run impacts on firm outcomes and its effects on firm and owner indebtedness.
By Claudia Martinez; PUC    Christopher Woodruff; University of Oxford
Presented by: Claudia Martinez, PUC
The Impact of Reverse Factoring on MSMEs: Firm-level Evidence from Mexico Abstract Since the 2008 global financial crisis, interest in supply chain finance has grown as firms increasingly seek alternative sources of working capital. In this context, reverse factoring (RF) has emerged as a prominent short-term financing instrument, particularly for micro, small, and medium-sized enterprises (MSMEs). Under RF arrangements, suppliers sell accounts receivable to financial intermediaries in exchange for immediate liquidity, benefiting from the lower financing cost of large, creditworthy buyers that guarantee payment through invoice confirmation. Using firm-level data on MSMEs in Mexico, this paper provides evidence on the effects of RF adoption. We document three main findings. First, access to RF is associated with a statistically significant increase in firm sales. Second, these gains are primarily driven by expansion along the extensive margin, as firms increase the number of active clients following adoption. Third, the magnitude and persistence of the effect depend on usage frequency: occasional use yields no measurable gains, whereas sustained use generates persistent improvements over time. In addition, descriptive evidence suggests that while RF reduces financing costs, it does not lead to systematic changes in payment terms.
By Lucas Figal Garone; Interamerican Development Bank    Victoria Luca; IADB    Rodolfo Stucchi; Inter-American Development Bank Group    Jose Tessada; Pontificia Universidad Católica de Chile
Presented by: Jose Tessada, Pontificia Universidad Católica de Chile
Session 9: Sesión organizada: Banco Central August 27, 2026 9:00 to 11:00 Location: UCM - F307
Bias in Forecasts of Foreign Exchange Rates
By Javier Turen; Pontificia Universidad Católica de Chil
Presented by: Javier Turen, Pontificia Universidad Católica de Chil
Inflation Expectations and Access to the Financial Markets
By Marco Rojas; Banco Central de Chile
Presented by: Marco Rojas, Banco Central de Chile
Exchange Rate Pass-Through: Expectations versus Reality
By Mariana García; Banco Central de Chile
Presented by: Mariana García, Banco Central de Chile
The Political Economy of Public Debt and Electoral Polarization Abstract This paper develops a politico-economic theory linking public debt and political polarization. We argue that fiscal constraints are politically asymmetric: debt disproportionately undermines left-wing electoral prospects by crowding out spending-intensive progressive agendas, inducing the right to strategically accumulate debt. Yet, strategic behavior is bounded: there is a party-specific debt threshold beyond which further debt accumulation is electorally unprofitable, with the right's threshold strictly lower than the left's. In equilibrium, a stochastic debt-electoral cycle emerges between these thresholds: left-wing governments accumulate debt, right-wing governments consolidate, and right-wing radicalism rises with indebtedness. The model offers a unified explanation for the U-shaped co-movement between public debt and right-wing radicalism, a pattern we document by constructing a new dataset of legislative elections for 31 OECD countries over the past century.
By Diego Huerta; University of Chile
Presented by: Diego Huerta, University of Chile
Session 10: Pensions August 27, 2026 9:00 to 11:00 Location: UCM - F302
Annuitisation and Mortality: Disentangling Selection from Behaviuor Abstract We re-examine the widely documented positive correlation between annuitisation and longevity by cleanly separating selection from causal effects—an empirical distinction that the literature has acknowledged but has not been able to identify credibly. Using administrative micro–data from Chile’s centralized pension quote system, we exploit monthly variation in the relative generosity of annuities versus programmed withdrawals generated by regulated PW formulas and market-based annuity pricing. These shocks serve as plausibly exogenous instruments for annuitisation in an IV bivariate probit model of post-retirement survival. Across horizons up to fifteen years, we find no statistically significant causal effect of annuitisation on survival for either men or women. The results imply that the observed longevity advantage of annuitants in Chile reflects selection rather than behavioral responses. By isolating the causal channel, the paper contributes to ongoing discussions on decumulation design by showing that moral-hazard-driven survival effects are unlikely to be a relevant policy concern in this setting.
By Maria Florencia Gabrielli; Universidad del Desarrollo    Manuel Willington; Universidad del Desarrollo
Presented by: Maria Florencia Gabrielli, Universidad del Desarrollo
Debt and Liquid Wealth: Evidence from Pension Fund Withdrawals Abstract We examine the response of individual borrowing to changes in liquid wealth, exploiting a quasi-natural experiment in Chile. During the COVID-19 pandemic, the government temporarily allowed partial withdrawals from otherwise illiquid pension accounts. The policy’s nonlinear withdrawal rules generate several kinks, which we use to estimate the elasticity of borrowing with respect to liquid wealth through a regression kink design. We find substantial debt repayment among the predominantly low-income, young, and female population, particularly for individuals with higher debt-to-income ratios within that population. We interpret these findings through a model in which the marginal cost of debt increases with borrowing.
By Enzo Cerletti; Central Bank of Chile    Tomás Cortés    Borja Larrain; Pontificia Universidad Catolica de Chile    Patricio Toro; Central Bank of Chile
Presented by: Enzo Cerletti, Central Bank of Chile
The Timing of Annuitization after Programmed Withdrawals: Reduced-Form Evidence from Chile Abstract Chile’s DC system allows a choice between programmed withdrawals (PW) and life annuities (LA). We examine the optimal timing for an irreversible switch from PW to LA. Our model balances PW’s higher initial payouts against escalating investment and longevity risks. Results show that delaying annuitization enhances utility only within a finite post-retirement interval, with longer optimal delays for women. Validating this with Chilean administrative data, we find that larger balances and favorable markets defer the switch, whereas higher life expectancy hastens it. Welfare gains from waiting are concentrated in early retirement and diminish thereafter. Ultimately, while temporary reliance on PW may be optimal, protracted delay is not.
By Rolando Rubilar; Universidad Federico Santa Maria    Jose Ruiz; Universidad de Chile
Presented by: Jose Ruiz, Universidad de Chile
Labor Supply Responses to Increasing Income for the Elderly; Evidence from Chile's Guaranteed Universal Pension Abstract This paper estimates the causal effect of a large non-contributory pension expansion on household labor supply, exploiting a regression discontinuity in the eligibility score governing Chile's Guaranteed Universal Pension (PGU). The August 2022 reform extended coverage from the poorest 60 to the poorest 90 percent of the elderly population, generating an exogenous income shock for households near the eligibility threshold. Using a DiD-by-year design that embeds a regression discontinuity in the cross-sectional dimension and an individual-level administrative panel covering the universe of formal labor market contributions, I find a sustained and statistically significant reduction in formal labor supply. Both the direct recipient and non-applicant household members reduce their labor supply in the same direction, consistent with intra-household income pooling. Implied labor supply elasticities range from −0.26 to −0.39 under full compliance and from −0.40 to −0.60 using the RD-estimated income shock, bracketing the lottery-based benchmark of the literature. The response is accompanied by a progressive decline in retirement savings balances, documenting a fiscal externality typically absent from program evaluations.
By Carlos Guastavino; University of chile
Presented by: Carlos Guastavino, University of chile
Session 11: Posters August 27, 2026 13:00 to 16:30
Terms of Trade Volatility, Business Cycles and Default Risk in Emerging Economies Abstract This paper examines the effects of terms of trade volatility shocks on emerging economies business cycles, distinguishing between common and country-specific innovations. We identify common and idiosyncratic terms of trade volatility shocks using the Particle Filter. A one-standard-deviation common volatility shock causes a fall in aggregate output and investment by 0.4% and 0.7% respectively, with domestic interest rates increasing by 0.4 percentage points. While common shocks account for 9% of output fluctuations, idiosyncratic shocks do not yield significant effects. The default premium channel is key for the transmission: increased terms of trade volatility raises default probabilities, leading to a tighter supply of credit. By incorporating this channel into an open economy model with stochastic volatility, we reproduce the empirical contractionary responses. Excluding the default premium channel leads to a counterfactual result—a negative relationship between volatility and interest rates—underscoring the importance of credit-supply behavior to understanding the effects of terms of trade volatility shifts.
By Rafael Torrealba; Pontificia Universidad Católica de Chile
Presented by: Rafael Torrealba, Pontificia Universidad Católica de Chile
Entry-Facilitating Merger Remedies: Evidence from the Fiat-Peugeot Merger in Chile Abstract This paper evaluates the effectiveness of entry-facilitating remedies in constraining upward pricing pressure generated by horizontal mergers. We study the 2021 Fiat–Peugeot merger in Chile, which was conditionally approved subject to a remedy intended to facilitate potential entry by Toyota into the small commercial van market, with the objective of limiting price increases driven by the high diversion rates between the merging firms. Since Toyota did not enter the market during the period analyzed, this case offers a particularly suitable setting to examine the disciplining role of contestability on market power. We combine reduced-form evidence with a structural estimation of differentiated product demand and a flexible conduct model on the supply side, allowing the degree of profit internalization to be estimated in both the pre- and post-merger periods. Our results indicate that post-merger conduct is consistent with near-complete profit internalization between the merging parties, suggesting that the entry threat was insufficient to materially discipline post-merger pricing incentives. Counterfactual simulations show that estimated efficiency gains were insufficient to offset economically meaningful price increases and the associated decline in consumer surplus. By contrast, realized entry by Toyota would have substantially mitigated these effects and restored competitive pressure. However, the strength of this disciplining channel, as well as the profitability and incentives to enter, depends on the scale at which entry can occur. Overall, the findings suggest that potential competition alone may be insufficient to discipline post-merger market power and that the effectiveness of entry-facilitating remedies hinges on enabling entry at a scale large enough to induce actual participation.
By Ricardo Santolaya; Universidad de Chile
Presented by: Ricardo Santolaya, Universidad de Chile
Concentración de riqueza y de poder en el transporte público en Talca: Caso de análisis para un mercado más amigable para los ciudadanos Abstract El presente trabajo tiene por objetivo analizar la concentración de riqueza y de poder en el mercado de transporte público urbano en la comuna de Talca, en la Región del Maule, Y su impacto en la calidad de vida de sus habitantes. Por medio de un enfoque critico sustentado en teorías neo-marxistas y de corte ordoliberalistas, se examina como la estructura actual del mercado (caracterizado por la baja competencia, la ausencia de regulación estatal y el control por parte de tres empresas) limita el acceso equitativo a la movilidad urbana. Por medio de un análisis de fuentes secundarias(como la Encuesta Origen Destino 2022), revisión de políticas públicas y datos institucionales (MMT y SII), se calcula el índice de concentración Herfindahl-Hirschman (HHI = 3.381,749), demostrando una alta concentración en el mercado del transporte. Se caracterizan las contradicciones en los registros oficiales, limitantes en la innovación (como la electro movilidad) y limitaciones en la planificación territorial. El estudio concluye que la falta de regulación efectiva perpetúa desigualdades urbanas y restringe el derecho a la ciudad, proponiendo una serie de recomendaciones orientadas a la transparencia, fiscalización y democratización del acceso a la movilidad colectiva.
By Daniel Jimenez; Universidad católica del Maule
Presented by: Daniel Jimenez, Universidad católica del Maule
Exchange Rate Pass-Through and Monetary Policy Response: An Analysis of Latin America’s Reaction to External Shocks Abstract Monetary policy in emerging economies is heavily influenced by external financial conditions. This study analyzes the effects of U.S. monetary policy shocks and changes in global volatility on a sample of Latin American economies, with particular emphasis on nonlinearities in domestic monetary policy responses arising from both the sign of the shocks and the prevailing degree of exchange rate pass-through. The main results are the following. First, Latin American monetary policy responds significantly to external shocks, but the response differs depending on the source and sign of the disturbance. U.S. monetary policy shocks tend to generate same-direction movements in domestic policy rates, although contractionary shocks appear to have more persistent effects than expansionary shocks. Second, changes in global volatility, measured through the VIX, propagate differently from U.S. monetary policy shocks, suggesting that external financial shocks operate through distinct transmission channels. Third, the degree of exchange rate pass-through matters for the domestic response, but not only by changing its magnitude. High- and low-pass-through episodes may differ in terms of the intensity, direction, and persistence of the responses of monetary policy, core CPI, and GDP. These findings suggest that both the degree of exchange rate pass-through and the nature of external shocks are key determinants of how Latin American economies absorb external disturbances and adjust domestic monetary policy responses.
By Paula Salvo; Universidad Adolfo Ibáñez
Presented by: Paula Salvo, Universidad Adolfo Ibáñez
Asymmetric Inflation Targeting under Multiple Objectives: Wavelet and Transfer-Entropy Evidence from Chile and the U.S. Abstract The central theme of this article revolves around a critical evaluation of the effectiveness and asymmetry of the inflation-targeting (IT) regime in conducting monetary policy. The primary objective of the study is to determine to what extent this regime succeeds in stabilizing prices within institutional tolerance ranges and to elucidate whether the interest rate reacts in a systematically asymmetric manner to inflationary deviations, examining how these responses vary across short, medium, and long-term horizons. To explain this dynamic, the study provides a comparative analysis of the behavior of the Central Bank of Chile -as a significant example of an inflation target established in an emerging economy- and the U.S. Federal Reserve, which operates under a dual mandate of price stability and maximum employment. However, the core differentiator of this work and its main contribution to the contemporary macroeconomic debate lies in demonstrating that traditional linear tools in the time domain are insufficient to capture the complexity of economic policy decisions, positioning the methodological design as the true analytical engine of the research. Unlike other conventional methodologies, an approach based on the Wavelet Transform and Transfer Entropy considers that macroeconomic variables are non-linear and non-stationary, and that their relationships are strongly conditioned by the state of the economy and the time horizon. Furthermore, traditional models, when estimating reaction functions such as the Taylor Rule through global linear regressions, restrictively assume that the central bank’s sensitivity to inflation is constant over time and symmetric to any type of deviation. In practice, this tends to obscure crucial phenomena, as a Central Bank may ignore very short-term inflationary shocks, considering them transitory, but react with full firmness if pressures persist in the medium term or threaten structural credibility in the long term. It is precisely this need to disaggregate economic interactions across different frequencies and capture non-linear information flows that justifies and necessitates the use of the proposed methodological strategy. The first component of this methodology is the Maximal Overlap Discrete Wavelet Transform applied through spatial multiresolution analysis. This tool functions as a mathematical prism that decomposes time series of inflation and interest rates into multiple simultaneous time-frequency scales. Due to this decomposition, short-term fluctuations (high frequency), medium-term business cycles (where MPR transmission typically operates), and long-term trends (low frequency) are separated. On this basis, Wavelet Coherence and phase vectors are calculated a technique that allows for measuring the degree of synchronization and co-movement between the interest rate and inflation over time, while also making explicit the patterns of lead and lag. The critical advantage of using Wavelets over traditional filters is their capacity to capture transitory and intermittent behaviors without distorting data at the endpoints of the sample, revealing that the relationship between variables is not static, but a dynamic process that mutates according to the horizon analyzed. The second essential methodological innovation is the incorporation of Effective Transfer Entropy, a concept derived from information theory. While traditional Granger causality relies primarily on linear structures and the correct specification of lags, Transfer Entropy is a non-parametric, model-free predictive metric. It is used in this study with the explicit purpose of measuring the net directionality and magnitude of the non-linear information flow between inflation and monetary policy instruments. By applying specific analysis periods with Monte Carlo simulations and shuffling techniques to neutralize biases associated with small samples, the tool allows for identifying with statistical precision the exact historical moments when these specific responses were activated. Thus, as both methodologies converge, the empirical design transforms into an ideal and novel tool for revealing the asymmetry underlying monetary policy. Respectively, the Wavelet analysis provides the temporal and frequency dimension, exemplifying both visually and quantitatively that, in Chile, the phase coherence between the interest rate and inflation intensifies in short and medium-term horizons only when inflation exceeds the 3% ceiling of the Central Bank of Chile’s tolerance band. For its part, Transfer Entropy robustly validates this finding by registering a statistically significant, unidirectional flow of information from inflation to the interest rate (MPR), which behaves exponentially during periods of crisis and fades in low-inflation environments.
By Cristian Colther; Universidad Austral de Chile    Gabriel Olivares-Zúñiga; Universidad Austral de Chile    Camilo Maldonado; Universidad Austral de Chile
Presented by: Gabriel Olivares-Zúñiga, Universidad Austral de Chile
Efectos del encarcelamiento materno en las trayectorias educativas de sus hijos Abstract Este trabajo estudia los efectos del encarcelamiento materno sobre las trayectorias educativas de los hijos en Chile, poniendo especial énfasis en el momento en que ocurre dicho encarcelamiento y en el rol de políticas públicas que buscan mitigar sus efectos. En particular, se analiza el efecto del encarcelamiento materno antes y después del nacimiento del niño/a. Adicionalmente, se analiza la elegibilidad al programa “Creciendo Juntos”, el cual permite a madres privadas de libertad convivir con sus hijos durante los primeros años de vida incluyendo apoyo en parentalidad. La motivación del estudio surge a partir de dos hechos relevantes. Primero, la evidencia internacional muestra que el encarcelamiento de un padre o madre puede tener consecuencias importantes en el desarrollo de los hijos, afectando tanto su comportamiento como sus resultados educativos. Segundo, en Chile existe un aumento sostenido del encarcelamiento femenino, donde una alta proporción de las mujeres privadas de libertad son madres, muchas de ellas con hijos menores de edad. En este contexto, el estudio busca responder dos preguntas principales: (i) cómo afecta a los niños el hecho de que su madre haya estado en prisión, y (ii) si el programa Creciendo Juntos sugiere una atenuación de los posibles efectos negativos de esta situación. Para abordar estas preguntas, se construye una base de datos formato panel a partir de registros administrativos del Ministerio de Educación, Gendarmería de Chile y el Registro Civil. Esto permite vincular información de rendimiento escolar (incluyendo puntajes SIMCE), características socioeconómicas y antecedentes penales de las madres. La muestra final incluye más de 12.800 niños cuyas madres estuvieron encarceladas en algún momento. Los outcomes educacionales de sus hijos/as son observados en cuarto grado. El análisis empírico se basa en comparar distintos grupos de niños según el momento en que ocurrió el encarcelamiento materno. En particular, se distingue entre aquellos cuya madre fue encarcelada antes de su nacimiento y aquellos que experimentaron el encarcelamiento durante su vida. Esta estrategia permite aislar el efecto de la separación madre-hijo como consecuencia de la prisión. Además, se utiliza un enfoque de “intention-to-treat” (ITT) para evaluar el impacto del programa Creciendo Juntos. Dado que no se observa directamente quién participa en el programa, se utiliza la elegibilidad (niños entre 0 y 2 años al momento del encarcelamiento) como una fuente de variación exógena. Esto permite estimar el efecto de tener la posibilidad de acceder al programa, incluso si no todos los elegibles participan efectivamente. Los resultados muestran que, en primer lugar, al comparar niños cuyas madres fueron encarceladas después del nacimiento de niño/a con aquellos cuya madre estuvo en prisión antes de que nacieran, se encuentra un efecto positivo en los puntajes SIMCE de aproximadamente 0,1 desviaciones estándar en Lenguaje y Matemática. Esto sugiere que la separación no necesariamente implica peores resultados académicos, lo que podría estar relacionado con mecanismos como la salida del niño de entornos familiares adversos. Sin embargo, estos resultados deben interpretarse con cautela. El análisis por percentiles muestra que los efectos positivos se concentran principalmente en la parte baja y media de la distribución de puntajes, sin evidencia de mejoras en los niveles más altos de desempeño. En Matemática, además, los efectos son más débiles y en muchos casos no significativos. Respecto al programa Creciendo Juntos, los resultados indican que este sí tiene un impacto positivo en el rendimiento académico. En particular, se observa un aumento cercano a 0,09 desviaciones estándar en Lenguaje y alrededor de 0,1 en Matemática para los niños elegibles. Además, se encuentra una reducción en la probabilidad de abandono escolar en torno a 0,03 puntos porcentuales. Estos resultados sugieren que permitir la convivencia temprana entre madre e hijo, junto con el apoyo en parentalidad, puede contribuir a mejorar los resultados educativos, aunque no elimina completamente los efectos adversos asociados al encarcelamiento. Por otro lado, el estudio también analiza dimensiones socioemocionales utilizando cuestionarios del SIMCE, particularmente en el área de autoestima académica y motivación escolar. En este caso, los resultados muestran efectos negativos, aunque de menor magnitud (alrededor de -0,03 desviaciones estándar), lo que indica que ni la convivencia en prisión ni la separación logran compensar completamente los impactos emocionales asociados a la situación familiar. En términos de heterogeneidad, no se encuentran diferencias relevantes por género, pero sí se observa que los efectos positivos del programa son mayores en el caso de madres condenadas por delitos no violentos. Esto sugiere que el contexto del delito y las características familiares pueden ser relevantes para entender los resultados. Finalmente, podemos concluir que el encarcelamiento materno tiene efectos complejos y no necesariamente unidireccionales sobre los hijos. Si bien la separación puede tener consecuencias negativas, también puede estar asociada a mejoras en ciertos contextos, dependiendo del entorno previo del niño. En este escenario, políticas como Creciendo Juntos juegan un rol relevante al mitigar parte de estos efectos, especialmente en etapas tempranas del desarrollo. No obstante, persisten desafíos importantes. Los resultados sugieren que las intervenciones deben complementarse con políticas más amplias que aborden las condiciones socioeconómicas de las familias y el bienestar socioemocional de los niños. De esta forma, se podría avanzar hacia una política pública más integral que reduzca las brechas educativas y sociales asociadas al encarcelamiento materno.
By Hugo Salgado; Universidad de Chile
Presented by: Hugo Salgado, Universidad de Chile
Session 12: Encuentro Doctoral, Sesión 1 August 27, 2026 14:00 to 16:00 Location: UCM - F305
Do Climate Change Concerns Set the Multilateral Climate Agenda? Abstract While agenda-setting has been widely studied in political science, it remains largely neglected in empirical climate finance research. This study fills this gap by incorporating unexpected climate change concerns that shape media attention and influence policy priorities. Focusing on 139 developing countries over the period 2008–2022, we estimate the impact of agenda-setting on multilateral climate funds (MCFs) project approvals using a Fixed Effects Pseudo-Poisson model. Climate change and agenda-setting are closely linked, as concerns about global warming, amplified through media attention, helped generate the political attention that ultimately made possible the establishment of the global climate governance framework under the United Nations Framework Convention on Climate Change (UNFCCC) in 1992. This framework institutionalized climate finance, largely controlled by developed countries (Global North), which mobilize resources to support climate action in developing countries (Global South). In this context, MCFs provide an important setting, as they operate with technical autonomy but remain exposed to the influence of donor countries and Global North media. The findings provide evidence of agenda-setting in the context of multilateralism, showing the nuanced nature of climate change-related issues covered by Global North media. They also highlight asymmetries in the global climate finance architecture, where media attention favors mitigation approvals, whose benefits are global, over projects addressing physical climate impacts in the Global South. This raises concerns about how allocation decisions are shaped within UNFCCC-linked funds and whether they are sufficiently aligned with the climate needs of developing countries.
By Sebastian Isaias Garcia; Universidad de Talca    Pablo Neudorfer; Universidad de Talca
Presented by: Sebastian Isaias Garcia, Universidad de Talca
Sowing the Future: Forecasting Fuel Prices with Agricultural Commodity Returns Abstract In this paper, we show that the prices of several agricultural commodities—including soybean, wheat, barley, sunflower oil, palm oil and soybean oil—can predict the returns of crude oil and three oil-related products: gasoline, propane, and heating oil. Using both in-sample and out-of-sample analyses across multiple horizons, we evaluate predictive performance through standard statistical metrics, including mean squared prediction error, mean directional accuracy and correlations. Our findings reveal that agricultural commodities exhibit important predictive ability at short horizons of one, three, and six months. Notably, our approach outperforms traditional benchmarks such as the random walk, simple autoregressions and linear models incorporating futures. Furthermore, we show that when combined with a simple trading strategy, our set of agricultural commodity prices can generate substantial annual gross returns in fuel markets. On average, our strategy yields a compelling annual return of 17.5%, suggesting that our findings may have important practical implications.
By Camila Luardo
Presented by: Camila Luardo,
Transition Risk and Sovereign Debt Costs: Evidence from Renewable Energy Production Abstract The climate transition can affect fiscal and financial stability because it alters the economic value of carbon-intensive sectors, reduces tax revenues associated with fossil fuels, necessitates increased public investment in adaptation and decarbonization, and may raise sovereign risk premiums if investors perceive that a country is ill-prepared for a low-carbon economy. Thus, this paper examines whether climate transition risk is associated with sovereign borrowing costs. Using an unbalanced panel of 61 advanced and emerging economies over 2010–2023, we estimate the effects of the renewable share of electricity generation on sovereign bond yields and spreads. We find that greater renewable energy production is robustly associated with lower sovereign borrowing costs. This relationship is more pronounced in emerging economies and in countries with higher climate vulnerability. Furthermore, the effect is particularly pronounced among economies with lower dependence on imported energy, including several net energy exporters, which may be more exposed to risks associated with the global transition toward low-carbon energy. Overall, the findings imply that investors reward economies perceived to be better prepared for the low-carbon transition.
By Laura Bedoya Cadena; Universidad de Talca
Presented by: Laura Bedoya Cadena, Universidad de Talca
When Do Land-Use Regulations Matter? Stringency, Compliance, and Urban Development in Santiago Abstract Does land-use regulation actually bind? And if so, through which instruments and under which institutional conditions? We study these questions in Greater Santiago. Using a rich regulatory panel covering 1990--2019, combined with building permits (2010--2020) and land transactions (2005--2020), we implement a shadow-price framework to measure the economic stringency of three key regulatory instruments: floor-area ratio (FAR), height limits, and occupancy requirements. We find that FAR is consistently binding across the city, with estimated price elasticities of 0.65--0.80. Height restrictions, by contrast, generate significant price effects only where local enforcement is strong; in low-compliance municipalities, height caps are perceived as a source of regulatory uncertainty rather than a credible constraint, and are capitalized as a price discount. Occupancy requirements are effectively non-binding everywhere. These results show that regulatory impact depends jointly on the instrument used and whether it is actually enforced — a finding with direct implications for housing policy in cities where formal rules and effective enforcement diverge.
By Joaquín Toledo; PUC
Presented by: Joaquín Toledo, PUC
Session 13: Encuentro Doctoral, Sesión 2 August 27, 2026 14:00 to 16:00 Location: UCM - F309
Efectos de los conflictos sociales en el Capital Humano Infantil en el Perú Abstract Esta investigación evalúa los efectos de los conflictos sociales sobre el rendimiento académico infantil en el Perú durante 2007–2016. Mediante un modelo de diferencias en diferencias con efectos fijos bidireccionales aplicado a estudiantes de segundo grado de primaria, se combinan microdatos de la Evaluación Censal de Estudiantes con registros georreferenciados de conflictos sociales, distinguiendo entre margen extensivo (presencia versus ausencia) y margen intensivo (variación en número de eventos condicionado a experimentar conflictos). Los resultados revelan efectos no lineales consistentes con umbrales de resiliencia. El margen extensivo no presenta efectos estadísticamente significativos, consistente con que disrupciones ocasionales son absorbidas sin deterioro detectable. En contraste, el margen intensivo revela que duplicar el número de conflictos se asocia con reducciones de 0.0167 desviaciones estándar en matemáticas y 0.0128 en lectura. Los efectos se amplifican en alta incidencia (7-136 eventos) en -0.0511 en matemáticas y -0.0365 en lectura. El análisis de timing descarta efectos anticipatorios, sin persistencia significativa tras cesar la conflictividad. Los impactos detectables estadísticamente se concentran en escuelas públicas urbanas y distritos grandes, aunque tests formales no rechazan igualdad de efectos entre grupos (p > 0.10). En territorios con catastro minero, las transferencias por canon se correlacionan negativamente con resultados educativos. Los hallazgos sugieren que conflictos sociales de alta incidencia vinculados a reivindicaciones sectoriales están asociados con disrupciones educativas que se manifiestan desproporcionadamente en escuelas públicas urbanas, distritos grandes y contextos con catastro minero, con implicaciones para políticas diferenciadas de mitigación.
By Diana Adco Valeriano; Pontifica Universidad Catolica de Chile
Presented by: Diana Adco Valeriano, Pontifica Universidad Catolica de Chile
Conflictos de baja intensidad y trayectoria educativa: Evidencia del conflicto de autodeterminación Estado-Mapuche en Chile Abstract En las últimas décadas, el estudio de los conflictos de baja intensidad, entre los que se encuentran los conflictos de autodeterminación indígena, ha adquirido creciente relevancia, particularmente en relación con sus consecuencias económicas. Sin embargo, aún se conoce poco acerca de sus efectos sobre la dinámica de las trayectorias educativas. Este artículo examina cómo la exposición al conflicto de autodeterminación entre el Estado chileno y el pueblo mapuche afecta la progresión de los estudiantes dentro del sistema educativo chileno. Utilizando un modelo de diferencias en diferencias heterogéneo y una base de datos longitudinal única que vincula registros académicos estudiantiles (2002–2018) con eventos de conflicto georreferenciados, se analizan tanto los efectos promedio como los efectos heterogéneos entre cohortes y grupos poblacionales. Los resultados muestran que la exposición al conflicto interrumpe la continuidad educativa de los estudiantes, reduciendo el rendimiento académico en 0,135 desviaciones estándar, incrementando la deserción escolar en un 17,2 % y aumentando la repitencia en un 9,5 % respecto de la media. Los efectos son particularmente pronunciados durante la transición entre educación primaria y secundaria, entre estudiantes rurales, mujeres y entre quienes se identifican como indígenas. Asimismo, la magnitud del impacto varía según el tipo y la intensidad de los eventos asociados al conflicto. Los hallazgos evidencian cómo los conflictos persistentes de baja intensidad pueden generar disrupciones educativas dinámicas que se acumulan en el tiempo, profundizando las desigualdades sociales y étnicas.
By Paola Bordon; Universidad de Chile    Dany Jaimovich; University of Talca    Mauricio Malespin; UNIVERSIDAD DE TALCA
Presented by: Mauricio Malespin, UNIVERSIDAD DE TALCA
Winning under Electoral Authoritarianism: Turning Out the “Right” Votes in Venezuela Abstract Electoral autocracies are one of the most prevalent forms of authoritarian rule. Existing research highlights media control, clientelism, political bias in the use of state resources, and opposition harassment as central strategies these regimes use to shape electoral competition. This paper identifies a distinct mechanism: the manipulation of electoral infrastructure as a tool of dispersed political engineering. We study this mechanism in Venezuela, an archetypal case of contemporary electoral autocracy, where the number of voting centers has nearly doubled over the last two decades. Using a novel panel dataset of geocoded polling centers covering 2000–2024, we show that new voting centers are significantly more likely to be established in areas that previously exhibited stronger support for the incumbent. The effect is particularly pronounced among centers that can be identified as politically motivated additions to the electoral infrastructure. We also find evidence that new centers are linked to higher voter turnout and to connections with local pro-government organizations. These findings highlight how incumbents in electoral autocracies can manipulate the organization of elections to maintain political advantage.
By Michael Albertus; University of Chicago    Felipe Baritto; Universidad de Talca    Dany Jaimovich; University of Talca
Presented by: Felipe Baritto, Universidad de Talca
Derutinización, reasignación ocupacional y calidad del empleo en Chile Abstract Este documento estudia la derutinización del mercado laboral chileno entre 2006 y 2024. Combino las encuestas CASEN con una medida de intensidad rutinaria de tareas específica para Chile y construyo un pseudo-panel de celdas definidas por macrozona, sexo, grupo etario y educación. La estrategia empírica compara la evolución de grupos con distinta exposición inicial a ocupaciones rutinarias, medida en 2006. Los resultados muestran que los grupos inicialmente más expuestos a la rutina se reasignan fuera de ocupaciones rutinarias, pero no principalmente hacia la cola no rutinaria. En 2011 y 2013, una desviación estándar adicional de exposición inicial reduce la participación en ocupaciones rutinarias en 6.4 puntos porcentuales, mientras aumenta la participación en ocupaciones intermedias. La reasignación no está asociada a destrucción agregada de empleo: la tasa de empleo aumenta en los grupos más expuestos y la inactividad cae. Sin embargo, hacia 2024 aparecen márgenes de fragilidad: la formalidad pierde robustez, el empleo parcial aumenta y las horas trabajadas se reducen. La evidencia sugiere que la derutinización chilena fue una reasignación dual: absorbió empleo en una primera etapa, pero no garantizó una transición sostenida hacia empleos formales, estables y de mayor calidad.
By Santiago Sandoval
Presented by: Santiago Sandoval,
Session 14: Urban Economics August 27, 2026 14:00 to 16:00 Location: UCM - F304
A Microfounded Model of Residential Segregation and Generalized Trust Abstract This paper develops a microfounded economic model of the relationship between residential segregation and generalized trust. Agents choose where to live by trading off housing costs, local amenities, and a preference for neighbors from their own group. Trust is an endogenous belief that each agent updates through Bayesian learning from day-to-day interactions within their chosen neighborhood. The central mechanism is a cognitive trap: agents who are pessimistic about out-group members self-sort into segregated neighborhoods, which limits the very interactions that would correct those beliefs, perpetuating low generalized trust in steady state. We prove four main results. First, a residential sorting equilibrium exists in which segregation and trust levels are jointly determined. Second, stronger homophilous preferences unambiguously increase equilibrium segregation. Third — and most subtly — the relationship between segregation and total experienced trust is non- monotonic: moderate exposure to one’s own group can raise total trust, but extreme segregation reduces it by starving agents of the out-group contact needed to overcome pessimistic priors. Fourth, the decentralized equilibrium is inefficient: agents do not internalize the harm their sorting inflicts on the trust formation of the other group, so segregation is excessive relative to the social optimum. We extend the baseline model to allow for asymmetric group trustworthiness and bilateral belief uncertainty, showing that the core mechanism survives both generalizations.
By Miguel Vargas; Universidad Andres Bello
Presented by: Miguel Vargas, Universidad Andres Bello
The role of social, spatial, and economic frictions in school socioeconomic segregation Abstract We quantify how social, spatial, and economic frictions affect school socioeconomic segregation. We use administrative data from Chile’s centralized school admission process, including the applicants’ individual rank-ordered preferences and residential addresses. Removing social or spatial frictions significantly decreases school socioeconomic segregation (16–19 percent). By contrast, eliminating economic frictions leads to a modest to null reduction in school segregation (4 percent). These results suggest that busing, transport policies, school constructions, or making public schools more attractive to middle-class families may significantly reduce socioeconomic segregation.
By Kenzo Asahi; Pontificia Universidad Católica de Chile
Presented by: Kenzo Asahi, Pontificia Universidad Católica de Chile
Territories at Risk: Irregular Immigration, School Vulnerability, and Organized Crime Abstract Using a municipality-level panel dataset covering 2019–2023 in Chile, we examine the relationship between immigration status and organized crime offenses. We find that irregular immigration is positively associated with organized crime, whereas regular immigration shows no such relationship. This association is highly heterogeneous across municipalities. It is stronger in areas with high educational vulnerability and among migrants aged 15–29, suggesting that youth vulnerability and weak educational environments may condition this relationship. These findings highlight the role of local structural conditions in shaping the migration–crime nexus and suggest that responses to organized crime in contexts of rapid migration should integrate educational capacity with migration and security policies.
By Sebastian Acevedo; Private    Patricio Valenzuela; Universidad Adolfo Ibañez
Presented by: Patricio Valenzuela, Universidad Adolfo Ibañez
Mobility and Crime Abstract The spatial allocation of crime control resources depends critically on understanding how criminal activity responds to population movements, yet empirical estimates of this relationship remain absent from the literature. We provide the first credible estimates of the elasticity of crime with respect to mobility---an important parameter for optimal enforcement policy. Using granular mobility data, we employ two complementary identification strategies: a first-differences specification that exploits within-location variation in mobility patterns, and a novel instrumental variables approach that addresses potential endogeneity between crime and mobility. Both strategies yield rank-consistent estimates across crime types, with instrumental variables estimates suggesting larger effects. We document substantial heterogeneity by crime-types: larceny and theft exhibit the largest responses to mobility, followed by motor vehicle theft, robbery, and burglary. These magnitudes imply that static resource allocation models---which ignore mobility patterns---may systematically misallocate resources (e.g., police presence) across space and time. Our results establish mobility as a first-order determinant of crime patterns and provide actionable guidance for evidence-based crime-control strategies.
By Patricio Dominguez; Inter-American Development Bank    Lucas García
Presented by: Patricio Dominguez, Inter-American Development Bank
Session 15: Environmental Economics August 27, 2026 14:00 to 16:00 Location: UCM - F308
Behavioral change in waste separation at source in Chile: An application of the theory of planned behavior Abstract Understanding how individuals engage in waste separation is a central challenge in sustainability and waste management, particularly in relation to their perceptions of public institutions. While governments and municipalities have implemented multiple initiatives to promote pro-environmental behavior, the effectiveness of these efforts is closely related to the behavioral factors associated with household decision-making. This study examines the key factors associated with waste separation intentions in several cities in southern Chile using an extended Theory of Planned Behavior (TPB) framework. The survey instrument incorporates additional constructs, including information availability, perceived role of municipalities and willingness to pay. Using structural equation modeling, the results indicate that subjective norms and perceived behavioral control are strongly associated with behavioral intention, while attitudes are not significantly related to intention. Information provided by municipalities is indirectly associated with intention through its relationships with attitudes and perceived behavioral control. The findings highlight the relevance of social influence, perceived feasibility, and access to information as factors associated with pro-environmental intentions. However, given the cross-sectional design of the study, these results should be interpreted as associations rather than causal relationships or observed behavioral change. These insights contribute to the extension of TPB in the context of environmental behavior and provide indicative implications for the design of waste management policies.
By Jean Pierre Doussoulin; Universidad Austral de Chile
Presented by: Jean Pierre Doussoulin, Universidad Austral de Chile
Interactions Between Curbside Collection and Open-Access Street Recycling Systems: Evidence from a Field Experiment in Chile Abstract This study evaluates the impact of introducing a curbside recycling collection service (CRCS) on plastic recycling, primarily PET bottles, when implemented alongside existing open-access street recycling bins. The analysis uses objective operational records from a 91-week non-randomized field experiment conducted in two middle-income neighborhoods in Osorno, Chile. The intervention included three stages: installation of street recycling bins in both neighborhoods, introduction of CRCS in the treatment area, and subsequent reinforcement with injunctive normative appeal brochures. Results show that CRCS increased plastic collection by 3.5 kg per withdrawal and polygon, equivalent to a 74% increase relative to the control group. When CRCS was combined with normative messages, plastic collection increased by 1.3 kg per withdrawal and polygon, equivalent to a 31.1% increase; however, this estimate cannot be interpreted as the isolated causal effect of messaging. The data provide suggestive evidence of complementarity, as street-bin use did not decline after CRCS was introduced. Non-recyclable material in the fixed infrastructure increased by 0.189 kg per collection during the CRCS-only stage, but this effect became smaller and statistically insignificant during the reinforcement stage. By jointly examining material recovery, system interaction, and contamination using objective longitudinal field data, this study contributes to the literature on recycling system design and household recycling behavior in middle-income urban contexts. The findings suggest that curbside collection can improve plastic recovery, provided that monitoring and communication strategies are used to preserve material quality.
By Carlos Chavez; Universidad de Talca    Francisca Trujillo; University of Talca
Presented by: Francisca Trujillo, University of Talca
Zero Energy Day: How Nationwide Blackouts Affect the Economy Abstract Electricity reliability is a central challenge for the energy transition, as growing energy demand, renewable energy integration, and natural disasters increase the risk of large-scale blackouts. However, the economic impacts of large-scale blackouts remain largely unknown. Combining electricity market data with high-frequency economic transaction data from Chile, we find that economic activity declined by 35 percent on the nationwide blackout day, but half of this loss was recovered on subsequent days, highlighting the importance of intertemporal substitution. Exploiting spatial variation in blackout severity, we show that accounting for endogenous recovery is critical when estimating the marginal value of lost load.
By Luis E. Gonzales C.; Central Bank of Chile
Presented by: Luis E. Gonzales C., Central Bank of Chile
Profit Sharing in Critical Minerals Value Chains: Evidence from a Direct Lithium Revenue-Sharing Agreement with Indigenous Communities Abstract The global race for critical minerals has intensified concerns that developing producer economies—and especially mining‑affected communities—may not capture a fair share of the rents generated along internationally fragmented value chains. This paper studies a distinctive profit‑sharing arrangement in the lithium sector: in 2016, a multinational mining company signed an agreement to transfer 3.5% of annual sale from its operations in Chile directly to an Indigenous representative organization, granting broad discretion over the allocation of funds. Using administrative education records and municipality‑level indicators, we estimate the causal effects of this direct revenue‑sharing mechanism on community well‑being. We implement complementary quasi‑experimental strategies—difference‑in‑differences at the individual level and synthetic control methods at the municipal level—to compare outcomes in San Pedro de Atacama to carefully selected mining municipalities. We find that exposure to the transfers increased the probability of completing tertiary education by about 10 percentage points above the control group mean, with effects concentrated in non-STEM programs and particularly among students with lower prior ability. At the local level, we document an initial and persistent expansion in economic activity, reflected in higher sales per capita, increased employment per capita, and rising wages. In contrast, health indicators exhibit limited systematic changes, with the exception of shifts in the average length of hospital stays. By focusing on a direct, contract‑based transfer from an advanced‑economy multinational to local communities in a developing producer country, the paper provides micro‑level evidence on how profit sharing operates within global critical‑minerals value chains. The results highlight the distributional consequences of alternative rent‑allocation arrangements beyond taxes and royalties and inform current debates on how international governance of critical materials can reconcile supply security with more equitable sharing of gains along the value chain.
By Maria Castro; Inter-American Development Bank (IDB)    Soledad Feal Zubimendi; Inter-American Development Bank (IDB)    Osmel Manzano Mazzali; Inter-American Development Bank    Daniela Valdivia Llerena
Presented by: Maria Castro, Inter-American Development Bank (IDB)
Session 16: Sesión organizada: Movilidad intergeneracional e igualdad de oportunidades August 27, 2026 14:00 to 16:00 Location: UCM - F303
Intergenerational Earnings Mobility in Chile: Bending the Upper Tail Abstract This paper examines intergenerational earnings mobility in Chile using administrative data that links parents and children in the formal private sector. We document strong non-linearities in mobility: while children from low- and middle-income families exhibit moderate mobility, those born to top-income parents experience high persistence. We explore the mechanisms underlying this “stickiness” at the top by decomposing both linear (intergenerational elasticity, rank-rank correlation) and distributional (mobility curve) indicators using Shapley values. Our findings show that educational pathways and firm quality jointly account for over 90\% of the explained variation in mobility. High school quality—particularly attendance at elite institutions—plays a central role in sustaining privilege among top earners, while access to high-paying firms emerges as the dominant driver across the entire distribution. These results point to the combined role of stratified education systems and labor market sorting in perpetuating inequality. A residual gap at the top suggests additional unobserved mechanisms, likely linked to social capital or informal networks. Our findings underscore the need for public policy to address not only educational inequalities but also access to elite labor market opportunities.
By Dante Contreras; Universidad de Chile    Javier Cortés Orihuela; The University of British Columbia    Juan Diaz; University of Chile    Pablo Antonio Gutierrez Cubillos; Universidad de Chile
Presented by: Pablo Antonio Gutierrez Cubillos, Universidad de Chile
Intergenerational Income Mobility around the World: A New Database Abstract This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.
By Ercio Munoz; Inter-American Development Bank
Presented by: Ercio Munoz, Inter-American Development Bank
Regional Inequality of Opportunity in Chile: A Long-Run Analysis Using Shapley and RIF Decompositions Abstract The family you are born into, the gender you are assigned at birth, the ethnic group you belong to—none of these are chosen, yet all of them shape your economic prospects in profound and lasting ways. The concept of inequality of opportunity (IO), formalised by Roemer (1998) and rooted in the philosophical tradition of Dworkin (1981), Cohen (1989), and Arneson (1989), offers a principled answer: outcome differences driven by circumstances beyond individual control are unfair and deserve compensation, while those reflecting personal effort and choice are not. Despite the rapid expansion of IO measurement across countries and methodological frameworks, the vast majority of studies operate at the national level, implicitly assuming that IO is uniform across territory. This is a strong assumption in countries like Chile, where regional disparities in income, productive structure, educational quality, and ethnic composition are deep and persistent. The Metropolitan Region of Santiago concentrates roughly 40 percent of the national population and accounts for nearly half of GDP, while regions such as La Araucanía—home to the largest indigenous population in the country—exhibit poverty rates more than twice the national average. A single national IO estimate aggregates fundamentally different opportunity structures into one number. This paper estimates IO across all 16 administrative regions of Chile using repeated cross-sections of CASEN from 2009 to 2024, tracking its evolution over a fifteen-year period that spans Chile's volatile macroeconomic cycle, the social uprising of 2019, the COVID-19 shock, and the subsequent recovery. We address three core questions: (i) How do Chilean regions differ in the level of IO and in the relative weight of each birth circumstance? (ii) Has regional IO converged or diverged over time, and which circumstances drive these dynamics? (iii) Does IO operate differently across the income distribution within each region, concentrating at the bottom as an intergenerational poverty trap or at the top as a barrier to elite positions? The empirical strategy combines three methodological building blocks. First, following the ex-ante parametric approach of Ferreira and Gignoux (2011), IO is estimated as the inequality of the counterfactual income distribution obtained by regressing individual labour income on a vector of observed circumstances—parental education, gender, indigenous background, and family composition—via OLS. Second, following Gradín and Zapata-Román (2026), we apply a Shapley decomposition to extend IO measurement beyond the MLD—the only index with the additive decomposability property—to non-decomposable indices such as the Gini and Atkinson family. Standard sequential decompositions produce path-dependent results whose direction of bias varies across indices: the Gini overstates IO while entropy measures understate it. The Shapley value resolves this by averaging the direct and indirect IO measures, yielding a path-independent estimate consistent across all indices. This same decomposition is additionally used in its more traditional role—attributing total IO to each individual circumstance within each region—to identify which factors are most binding in each territorial context. Third, we apply a Recentered Influence Function (RIF) decomposition in the spirit of Oaxaca-Blinder (Firpo, Fortin, and Lemieux, 2009, 2018) to decompose changes in the income distribution across periods within each region into a composition effect—reflecting shifts in the characteristics of the workforce—and a wage structure effect—capturing changes in how the labour market remunerates each circumstance. Applied to non-linear distributional statistics such as quantiles and the Gini, this framework allows us to assess not only how much IO has changed over time in each region, but which circumstances drive those changes and at which point of the local income distribution they operate most intensely. We expect to find substantial regional heterogeneity in IO levels, with the Metropolitan Region exhibiting systematically higher IO than other territories, reflecting amplified returns to parental human capital in a high-skill service economy. The Shapley decomposition is expected to reveal that the dominant circumstance varies sharply across regions: gender in the mining-dominated North, where extreme occupational segregation generates large earnings gaps; and ethnic background in the South—particularly in La Araucanía, Los Ríos, and Los Lagos—where indigenous disadvantage in the labour market is most acute. The RIF analysis is expected to show that IO in the Metropolitan Region is most concentrated above the median—consistent with a glass-ceiling pattern—while in southern regions it operates more strongly at the bottom of the distribution, consistent with intergenerational poverty trap dynamics. The policy implications follow directly. Identifying which circumstances are most binding in each region—and at which point of the local income distribution they operate—generates actionable priorities for territorially targeted social policy. If gender drives IO at the top in the North, wage transparency and anti-discrimination enforcement in the mining sector are the priority instrument. If ethnic background drives IO at the bottom in the South, early childhood interventions and culturally sensitive educational programmes are more relevant. The evidence provided by this paper offers a diagnostic that is far more precise than the national IO estimates currently used to justify redistributive policy in Chile, and contributes directly to the debate on the decentralisation of social policy design.
By Gabriela Zapata Román; Universidad Central de Chile
Presented by: Gabriela Zapata Román, Universidad Central de Chile
Session 17: Financial Frictions & External Shocks August 27, 2026 14:00 to 16:00 Location: UCM - F307
Heterogeneous Banks and the Transmission of External Financial Shocks Abstract This paper studies how bank heterogeneity shapes the transmission of external financial shocks in economies with foreign currency exposure. We develop a New Keynesian model with ex-post heterogeneous banks that rely on both domestic and foreign currency funding and face idiosyncratic credit risk. A key mechanism is the Marginal Propensity to Lend (MPL), which varies across intermediaries and links their balance sheets to aggregate outcomes. Using sequence-space methods, we show that a new distributional channel emerges, which implies that external shocks are significantly more contractionary than in representative-bank frameworks, as they trigger endogenous shifts toward more constrained banks, amplifying aggregate fluctuations. This new distributional channel implies that both foreign currency exposure and macroprudential policy operate primarily through their effects on the composition of bank balance sheets: greater exposure increases amplification, while tighter prudential regulation dampens it by limiting the mass of financially constrained intermediaries.
By Luis Cabezas; BCCh    Carlos Lizama; Central Bank of Chile    Gonzalo Marivil; Bocconi University
Presented by: Gonzalo Marivil, Bocconi University
Two Layers of Bank Interconnectedness and Aggregate Dynamics Abstract Banking networks are important to financial contagion, however, empirical work often observes only one layer of interconnectedness. We study the Chilean banking network through two distinct layers: contractual exposures arising from bilateral funding obligations and behavioral interactions arising from strategic interdependence. The contractual layer is constructed from confidential administrative records on bilateral interbank obligations, whereas the behavioral layer is estimated from balance-sheet information without prior knowledge of network ties. We examine the dynamics of both layers over the business cycle and in response to monetary-policy surprises, focusing on when they diverge or align. Our findings provide empirical evidence on how the diversification-contagion trade-off emphasized by the theoretical literature is reflected in the cyclical evolution of banking-network topology. They also suggest that macroprudential monitoring based solely on contractual exposures may overlook a behaviorally driven channel of shock propagation.
By Luis Chancí; Universidad Santo Tomás    Paulo Bobadilla; Comisión Para el Mercado Financiero
Presented by: Luis Chancí, Universidad Santo Tomás
Capital Buffers and Financial Frictions - A Theory of Macroprudential Policy Transmission Abstract This paper develops a simple macro-financial model with costly enforcement and capital requirements to study how financial frictions interact with macroprudential policy. When the enforcement constraint binds, the competitive equilibrium is inefficient: the planner prefers a positive spread between equity and deposit funding costs to deal with a deposits interest rate pecuniary externality derived from the financial friction, while markets force them to converge. We show that the constrained-efficient allocation can be implemented through either a subsidy on equity issuance or an equivalent tax on deposits, though both require strong informational assumptions. A countercyclical capital buffer offers a more practical alternative, and we show theoretically and numerically that it can replicate the planner’s allocation.
By Luis Cabezas; BCCh    Luis Cespedes; Universidad de Chile    Carlos Lizama; Central Bank of Chile
Presented by: Luis Cabezas, BCCh
Session 18: Monetary Policy & Macro Dynamics August 27, 2026 14:00 to 16:00 Location: UCM - F302
Invoices rather than Surveys: using Machine Learning to Monitor the Economy Abstract Using the universe of electronic invoices in Chile we develop a methodology to construct a labeled corpus of product descriptions and use a machine learning algorithm to classify firms’ transactions into product categories. The resulting classification allows us to construct measures of machinery and equipment outlays and goods consumption that closely track their national accounts counterparts, while also tracing the effects of shocks on consumption and their implications for consumer price index measurement. Using the COVID-19 pandemic as a case study, we document a reallocation toward durable goods, show that mobility restrictions and income support policies do not fully account for these shifts, and quantify the implications of expenditure reallocation for consumer price index measurement.
By Emiliano Luttini; World Bank    Matias Pizarro; Instituto Nacional de Estadísticas    Dagoberto Quevedo; Banco Central de Chile    Marco Rojas; Banco Central de Chile
Presented by: Marco Rojas, Banco Central de Chile
Do consumers save against inflation uncertainty? Abstract Recent inflation volatility has renewed interest in how inflation risk affects aggregate demand in economies with nominal wage rigidities and incomplete markets. The standard intuition is that higher transitory inflation risk, by increasing real wage uncertainty, should strengthen precautionary saving. We show that in a canonical incomplete-markets model, this intuition can be misleading. Inflation risk is equivalent to real return risk once human wealth is capitalized, so that wage risk and asset return risk are intertwined. With recursive preferences and unit elasticity of intertemporal substitution, consumption remains a constant share of total wealth, independently of risk aversion, and inflation volatility does not alter precautionary saving or marginal propensities to consume. The effect of inflation risk on aggregate demand, therefore, hinges on the elasticity of intertemporal substitution rather than on risk aversion alone.
By Alexandre Janiak; Pontificia Universidad Catolica de Chile    Ignacio Rojas; Central Bank of Chile    Paulo Santos Monteiro; University of York
Presented by: Alexandre Janiak, Pontificia Universidad Catolica de Chile
Monetary Policy Without Borrowing: Capacity Constraints and Lumpy Investment Abstract We study how debt access shapes firm-level monetary transmission using monthly admin- istrative data for the universe of Chilean firms matched to tax records, a comprehensive credit registry, and monetary policy surprises. Monetary policy passes through rapidly to borrowing costs: about 70% of a surprise is reflected in rates on new loans within 20 days. Yet real effects are concentrated among firms with debt. A 100-basis-point contractionary surprise lowers cumulative investment by about 0.18 percentage points of assets after 24 months, while firms without debt show near-zero responses at short horizons. Investment also rises sharply when firms first obtain debt and maintain it. We develop a model of limited debt access and lumpy expansion that accounts for these facts: firms with debt access adjust capital on the relevant margin, whereas firms without access save toward discrete expansion, so affordability rather than the user cost governs short-run investment.
By Boragan Aruoba; University of Maryland    Andrés Fernández; Banco Central de chile    Will Jianyu Lu; Central Bank of Chile    Felipe Saffie; University of Virginia
Presented by: Will Jianyu Lu, Central Bank of Chile
Session 19: Sesión organizada: Climate Transition Risk: Asset Prices, Market Responses, and Macroeconomic Trade-Offs August 28, 2026 9:00 to 11:00 Location: UTalca - Auditorio FEN
Hard Law, Soft Markets: The Heterogeneous Response of Fossil Fuel Equities to Transition Risk News Abstract Has climate transition risk become priced into fossil fuel equities? We document that market sensitivity to climate news evolved from zero to economically significant over 2007–2023. Using smooth-transition local projections on 598 fossil fuel firms traded on U.S. stock exchanges, we find that unexpected climate media shocks generated no price response before 2014 but produced cumulative 30-day declines of 49 basis points by 2023. This evolution occurred gradually over 2014-2019, consistent with markets progressively updating beliefs about policy credibility rather than reacting to discrete events. Decomposing by news theme reveals striking heterogeneity: enforceable mechanisms like climate legislation (-79 bp) and carbon taxation (-69 bp) trigger substantially stronger responses than voluntary carbon credit markets (-29 bp). These time-varying sensitivities imply static climate betas mismeasure transition exposure, with direct consequences for portfolio risk management, corporate cost-of-capital forecasting, and design of market-credible climate policy.
By José Barrales; Universidad San Sebastián    Pablo Neudorfer; Universidad de Talca
Presented by: Pablo Neudorfer, Universidad de Talca
The Ambiguity Costs of Climate Change Abstract Weather risks are fundamentally more difficult to manage under climate change because past experience of weather is potentially unrepresentative of current exposure. The possibility of climate change acts as a global information shock, degrading utility of the historic weather record with implications for actors across the economy making weather-contingent decisions. Here we quantify these ambiguity-related costs for a major climate risk, namely urban flood damages in the United States. Using daily rainfall for 151 US cities from 1970 to 2024, we contrast the 2024 extreme rainfall distribution under a Bayesian model that assumes the rainfall distribution is stationary with one that allows for time-evolving GEV parameters, consistent with the possibility of a changing climate. Estimated tail risks increase notably when allowing the climate to evolve: the 99th percentile rainfall event is larger in 89\% of the cities in our sample. Economic costs of these tail risks are amplified by convex damage functions, which we estimate at the city level using flood insurance policy and claim data. Modeling aggregate losses for portfolios at the city, state, regional, and national level, we find geographic diversification only modestly abates these tail risks: the 99th percentile loss event is 4-5 times larger when accounting for evolving climate risk at all levels of aggregation. In a private insurance market these much larger tail risks would substantially increase required capital holdings and the cost of supplying insurance. Our analysis highlights the substantial economic costs of climate change-driven ambiguity in weather extremes and sheds light on recent volatility in US insurance markets.
By Frances Moore; University of California at Davis    Matias Solorza; University of California at Davis    Benjamin Collier; University of Wisconsin-Madison
Presented by: Matias Solorza, University of California at Davis
Commodity Price Uncertainty and the Transition to Net-Zero Emissions. An E-DSGE Model for a Developing Economy Abstract We propose an Environmental Dynamic Stochastic General Equilibrium (E-DSGE) model to study how a commodity price boom would affect the transition to a Net-Zero Emissions (NZE) economy, according to what was committed in the 2015 Paris Agreement. We calibrate the model to replicate some envi- ronmental and macroeconomic features of Chile, a commodity exporting country that relies heavily on the performance of that economic sector. The model features the production of electric energy using green and brown energy as inputs. A commodity price boom may benefit short-term economic goals and increase commodity production despite its long-term negative environmental consequences. Our results show that (i) a commodity price boom in the midst of the transition makes the environmental goals harder to achieve and, (ii) despite the latter, NZE goals can be achieved by implementing public and private mitigation strategies, highlighting the role of oil taxes and the efficiency in the production processes regarding green and brown energy firms. Besides, we show that, in the long run, aggregate economic welfare increases -with respect to the initial steady state- at the same time the economy moves toward a more greener and less polluted scenario, where technological improvements dominate policy strategies in this regard
By Jose Barrales-Ruiz; Universidad San Sebastián    Pablo Neudorfer; Universidad Austral de Chile    Jose Valenzuela; Universidad Católica del Maule
Presented by: Jose Valenzuela, Universidad Católica del Maule
Green Hydrogen and Export-Led Development: Macroeconomic Trade-Offs, Inequality, and Decarbonization Limits in Chile Abstract Green hydrogen is increasingly promoted as a cornerstone of global decarbonization strategies and a new source of economic growth for resource-rich economies endowed with abundant renewable energy. This narrative often presents hydrogen as a “triple win” capable of simultaneously accelerating decarbonization, generating new export opportunities, and fostering economic growth. However, it typically assumes that future technological improvements, infrastructure expansion, and growing international demand will make hydrogen competitive at scale. This paper examines the broader economic implications of that transition under the assumption that these constraints are progressively overcome. Using Chile as a strategic case, we evaluate whether large-scale green hydrogen expansion can simultaneously support decarbonization and economic development in a resource-dependent economy. We develop the first economy-wide CGE assessment of large-scale green hydrogen deployment in Chile, explicitly incorporating hydrogen production, fossil-fuel substitution, renewable expansion, and export growth. Rather than determining hydrogen competitiveness endogenously, the model uses official bottom-up decarbonization scenarios developed by Chile’s Ministry of Energy to calibrate the exogenous efficiency improvements, cost reductions, and market expansion required to achieve projected hydrogen adoption. Our results show that under the assumed competitiveness trajectory, green hydrogen expansion increases GDP, investment, and exports while reducing emissions relative to the baseline scenario. However, these aggregate gains are accompanied by important trade-offs. Hydrogen expansion generates Dutch Disease pressures, weakens traditional tradable sectors, and produces regressive distributive outcomes that disproportionately benefit higher-income households and skilled workers. Moreover, emissions reductions, while positive, remain relatively modest compared to Chile’s broader carbon neutrality targets.
By Raul ORyan; Universidad Adolfo Ibañez    Andres Ulloa; USS    Jose Barrales-Ruiz; Universidad San Sebastián    Ignacio Leiva; Universidad de Chile
Presented by: Jose Barrales-Ruiz, Universidad San Sebastián
Session 20: Economics of Education: Human Capital August 28, 2026 9:00 to 11:00 Location: UTalca - FEN1
Guidance Over Adoption: Experimental Evidence on AI-Assisted Learning in Higher Education Abstract We study whether institutions can shape how students use widely available artificial intelligence tools and whether this affects learning outcomes. I design and deploy a course-specific large language model assistant (GPT-UAI) for undergraduate econometrics and evaluate it through two randomized interventions implemented across seven coordinated course sections at a selective university in Chile. The first intervention targets the extensive margin of use, encouraging adoption prior to the midterm exam. Encouragement increases awareness and reported usage but does not change perceived value or improve midterm performance. The second intervention targets the intensive margin, providing guidance on learning-oriented use prior to the final exam. Guidance shifts interactions toward tutor-style engagement, increases perceived usefulness by 0.38 standard deviations, improves final-exam performance by 0.21 standard deviations, and raises the probability of earning a passing grade by 12 percentage points. These results indicate that when access to AI tools is widespread, learning gains depend less on adoption and more on how institutions shape their use.
By Sebastian Gallegos; UAI Business School
Presented by: Sebastian Gallegos, UAI Business School
College as a Commitment Device: Parental Altruism and the Samaritan’s Dilemma Abstract Why do parents invest so heavily in their children’s college education? I argue that college acts as a commitment device against a Samaritan’s dilemma: anticipating parental support, children under-save and over-consume, and college mitigates this by permanently raising the child’s income, shrinking the set of states in which parents optimally transfer. Consistent with this mechanism, in matched parent-child data parents of college children consume more, save with a weaker precautionary motive, and transfer less often, though in larger amounts when they do. A dynastic model estimated by the simulated method of moments shows that the friction raises college enrollment above the level a parent who could commit would choose, because the anticipation of support subsidizes attendance. The welfare consequences of removing the friction—and of policies such as free college— depend on whether parents can commit, since the same transfers that distort the college decision also insure children against income risk.
By Agustin Diaz; Central Bank of Chile
Presented by: Agustin Diaz, Central Bank of Chile
The Younger Brother Effect: How siblings shape educational success Abstract We provide causal evidence that there is a younger-brother penalty which emerges in early educational outcomes. The younger-brother penalty is significantly larger for girls than boys. Sibling sex affects grades, school attendance and a wide range of self-reported behavioural measures, but has little effect on proxies for parental investment or expectations. The younger-brother penalty is largest for siblings who are close in age and who attend the same school, further supporting the hypothesis that the effect of sibling sex arises through child interaction rather than parental response. Our findings suggest that gender gaps can appear in childhood as a result of random differences in family composition.
By David Contreras; Universidad Adolfo Ibáñez    Richard Upward; University of Nottingham
Presented by: David Contreras, Universidad Adolfo Ibáñez
Session 21: Health Economics August 28, 2026 9:00 to 11:00 Location: UTalca - FEN2
Education as Protection: Parental Schooling and Adolescent Suicidal Ideation in Chile Abstract Adolescent suicidal ideation has become an increasingly important public health con- cern. This paper studies whether parental educational attainment operates as a protec- tive factor against adolescent suicidal ideation in Chile. Using data from the Encuesta de Bienestar Social (EJB), I estimate ordered response models while addressing the po- tential endogeneity of parental education through recursive mixed-process systems (CMP) and extended ordered probit models using communal educational deprivation as an instrumental variable. A distinctive feature is the incorporation of a latent psy- chosocial component following the residual-based framework of Van Praag et al. (2003). The index isolates persistent emotional heterogeneity after observable socioeconomic and demographic characteristics have been partialled out from several subjective self- perception and emotional distress domains. The results show that parental education operates as a robust protective factor against adolescent suicidal ideation across all specifications. Endogenous models yield stronger estimated effects, while the latent psychosocial component remains significant throughout the analysis.
By Diego Vásquez; UNAB
Presented by: Diego Vásquez, UNAB
Parental Health Shocks and Children's Educational Trajectories Abstract This paper examines how severe parental health shocks affect the educational trajectory of adolescents. Leveraging linked administrative data from Chile and quasi-random variation in the timing of first-time cancer hospitalizations among parents, we implement a stacked dynamic difference-in-differences design that compares students exposed to a parental cancer hospitalization with their untreated classmates in the same school, grade, and cohort. The results show that parental illness significantly reduces school enrollment and attendance in the year of the shock for 12-18 year old children. Heterogeneity analyses reveal a clear dose–response pattern: the negative impacts are twice as large for high-severity cancer cases, more persistent among students enrolled in private schools and among girls than boys. These findings highlight the disruptive role of parental health shocks on children’s human capital accumulation and underscore the importance of institutional and social protection mechanisms in mitigating their intergenerational consequences.
By Nicolás Libuy; University College London
Presented by: Nicolás Libuy, University College London
The Mental Toll of Motherhood? Evidence from a Maternity Leave Expansion Abstract This paper examines the impact of maternity leave duration on maternal mental health by exploiting a 2011 Chilean reform that extended paid postnatal leave from 12 to 24 weeks. A key feature of this reform is that maternity leave in Chile is mandatory and includes full income replacement for most women, allowing us to isolate the effect of leave length without selection bias or income confounds. Using administrative data from the private health insurance system, we measure maternal mental health based on paid sick leave days attributed to mental health conditions identified through ICD-10 classifications. Our findings indicate that the extension of maternity leave increased the number of sick leave days taken due to mental health issues, suggesting that longer leave may have unintended negative consequences for maternal well-being.
By Fabian Duarte; Universidad de Chile    Valentina Paredes; Universidad de Chile
Presented by: Valentina Paredes, Universidad de Chile
Home Care, Disability, and Caregiver Burden: Experimental Evidence from Bogotá Abstract We evaluate a home-based respite care and functional training program for caregiver–person with disability (PwD) pairs in Bogotá, Colombia, using a stratified randomized controlled trial. The intervention provided four weekly hours of in-home occupational therapy for PwDs, together with cultural transformation workshops and caregiver skills certification. Treatment assignment generated large improvements in PwD functional independence, reducing functional limitations and increasing autonomy in daily activities, particularly in self-care, cognition, and activities of daily living. Among caregivers, the program increased household recognition of care work and support for sharing care responsibilities by 12–15 percentage points, while reducing selected dimensions of subjective burden related to personal autonomy and tension. However, it did not reduce care time, promote redistribution of tasks toward men, or improve physical and emotional well-being. The findings suggest that short-cycle home care programs can strengthen PwD autonomy and shift care-related norms, although behavioral change may require longer exposure.
By Marcela Perticara; Universidad Diego Portales
Presented by: Marcela Perticara, Universidad Diego Portales
Session 22: Labor Markets, Technology and Productivity August 28, 2026 9:00 to 11:00 Location: UTalca - 805
Estimating the effect of automation on the labor market in an emerging small open economy using firm-level microdata Abstract This study analyzes the relationship between machine adoption and employment across workers' income quintiles, utilizing firm- and worker-level microdata for Chile from 2009 to 2024, considering a total of 80,000 firms and 2.9 million workers. To investigate this dynamic, I estimate a panel regression complemented by a generalized propensity score (GPS) and difference-in-differences (DiD) approach to address endogeneity concerns. The results indicate that the relationship between machines and employment is economically small but heterogeneous. Across specifications, I find a consistently positive relationship between machines and high-income workers, suggesting complementarity between automation and high-skilled labor. Panel regressions show weak or negative associations for low- and middle-income workers, depending on the economic sector. GPS estimates point to a modest negative average treatment effect on middle-income workers, while DiD estimates suggest positive associations–in the treatment firms–between machines and all employment quintiles, and the intensity is increasing across the employment quintiles. Overall, the findings suggest that automation has had heterogeneous but limited relationships with employment in the Chilean labor market, with magnitudes that are smaller than those found in advanced economies.
By Camilo Levenier; Central Bank of Chile
Presented by: Camilo Levenier, Central Bank of Chile
Why is the College Premium Falling? The Role of Composition Abstract Recent studies suggest that the increasing supply of college-educated workers in Latin America has reduced returns to skill, as evidenced by the decreasing college premium. We show that the college premium does not accurately represent returns to skill, particularly in the context of significant expansions in tertiary education. Using novel data from Brazil, we find that returns to skill actually increased by 24% over 16 years, as graduates increasingly came from newer, lower-ranked universities. Using a simple supply and demand framework, we show that skill-biased technical change grew by 3% annually, in contrast to the apparent-0.1% yearly decrease.
By Tomas Guanziroli; Universidad Andrés Bello    Ariadna Jou; University of Chile    Beatriz Rache; IEPS
Presented by: Ariadna Jou, University of Chile
Skill premia for AI and computer requirements: evidence from online job ads Abstract I measure the AI wage premium using Chilean online job advertisements from 2022 to 2026, exploiting mandatory backend point-estimate wages that ensure reliable measurement of offered compensation. Using large language models, I classify 16 skill requirements and estimate high-dimensional fixed-effects models that absorb firm, quarter, and occupational heterogeneity. Five results emerge. First, I document a developer vs. end-user bifurcation: AI skills yield a 4.7 percent premium, but this return is driven entirely by developer roles, while end-user applications earn no premium. Second, the premium compressed rapidly over time across all sectors, consistent with tool commoditization. Third, the return exhibits a strict experience gradient: AI pays no premium for entry-level positions but rises sharply with tenure. Fourth, I find education neutrality: the premium does not vary by educational tier once firm identity is absorbed. Fifth, quantile regressions show a 90th percentile wage skew, where the premium rises from zero at the 10th percentile to 7.2 percent at the 90th. Finally, I develop a Task-Augmented Vintage Capital model to provide a unified theoretical explanation for these facts. The model shows how the interaction of declining cognitive adoption costs and tacit, firm-specific experience drives these wage dynamics, reconciling the empirical findings.
By Benjamin Villena-Roldan; Universidad Andrés Bello
Presented by: Benjamin Villena-Roldan, Universidad Andrés Bello
Devaluation of occupations versus tasks: the gender wage gap in Chile Abstract The devaluation hypothesis states that female-dominated occupations are culturally undervalued and thus lower paid. Mainstream economics states that tasks at the job affect wages. We test these hypotheses using a Heckman selection-corrected Mincer regression for nationally representative Chilean data from 2003, 2013, and 2022. We find both hypotheses to be relevant, although with diminishing relevance over time. Occupational feminization shows a negative wage association, but the effect has declined over time and converged across genders. Task content also matters: abstract tasks command substantial wage premiums, consistently exceeding returns to routine and manual tasks. Yet, gender differentials in task returns have become negligible by 2022. Controlling for these mechanisms does not eliminate the female wage penalty, which remains at 17.4% by 2022. Quantile analysis further reveals an overall compression of differences over time, consistent with the reduced explanatory power of feminization and tasks for the gender wage gap in Chile.
By Andrea Bentancor; Universidad de Talca
Presented by: Andrea Bentancor, Universidad de Talca
Session 23: Fiscal Policy August 28, 2026 9:00 to 11:00 Location: UTalca - 806
Population Aging and Fiscal Sustainability in Resource-Rich Economies: The Case of Chile Abstract Emerging economies face important long-run fiscal sustainability challenges associated with demographic change and the productive capacity of commodity sectors. Population aging can weaken labor supply growth, reduce the expansion of tax bases, and increase age-related public expenditures, while declining productivity in non-renewable sectors may further constrain fiscal capacity and economic growth. This paper develops a semi-structural macro-fiscal model to analyze the long-term implications of population aging for economic growth, fiscal sustainability, and public debt dynamics in resource-rich economies. The model integrates demographics, labor markets, sectoral production, fiscal revenues, age-related public expenditures, and government debt within a unified deterministic and stochastic simulation structure. The model is applied to Chile, a particularly relevant case given the speed of its demographic transition, the importance of consumption taxation, and the central role of mining in macroeconomic and fiscal performance. The results indicate that demographic aging generates persistent fiscal pressures through both expenditure and revenue channels. Rising pension and health spending increase primary expenditures as a share of GDP, while slower labor force growth and demographic changes constrain output growth and the expansion of tax bases. Under current policy settings, these forces lead to a gradual but sustained increase in public debt over the long run. Stochastic simulations further show that uncertainty surrounding age-related expenditures generates substantial dispersion in debt trajectories over time. Policy simulations suggest that increases in labor force participation mainly improve fiscal sustainability through stronger revenues, while increases in statutory retirement ages affect both revenues and pension expenditures, generating larger fiscal improvements. Nevertheless, the results indicate that such reforms mitigate but do not fully offset the long-run fiscal consequences of demographic change.
By Juan Pablo Medina; Adolfo Ibáñez University    Michael Pedersen; Universidad Adolfo Ibáñez    Gerardo Reyes-Tagle; Inter-American Development Bank
Presented by: Michael Pedersen, Universidad Adolfo Ibáñez
Fiscal capacity and the flypaper effect Abstract This paper shows that the flypaper effect varies systematically with fiscal capacity. From a public choice perspective, fiscal capacity shapes not only the marginal cost of public funds but the institutional conditions under which local politicians respond to transfers. Municipalities with lower fiscal capacity exhibit stronger expenditure responses to unconditional transfers because these transfers allow them to reduce their marginal cost of public funds proportionally more. Using data from 345 Chilean municipalities over two decades, we estimate expenditure elasticities separately by fiscal capacity quintile. Transfer elasticity declines monotonically across the fiscal capacity distribution, while own revenue elasticity increases gradually. The gradient is driven primarily by the decline in transfer elasticities rather than by changes in own revenue elasticities. The flypaper effect vanishes entirely in high-capacity jurisdictions. Chilean municipalities provide an ideal setting for testing this relationship: centrally determined tax rates ensure that capacity differences reflect collection constraints rather than policy choices. These findings have direct implications for the design of intergovernmental transfer systems in developing countries, where fiscal heterogeneity is pronounced and transfers risk entrenching institutional weakness.
By Rodrigo Saens; Universidad de Talca, Chile    Paulo Cox; Universidad de Talca    Carlos Villalobos; University of Goettingen
Presented by: Rodrigo Saens, Universidad de Talca, Chile
Political Budget Cycles Beyond Annual Data Abstract This paper studies political budget cycles using high-quality monthly fiscal data from local governments. While most empirical work relies on annual aggregates, elections often occur outside fiscal year-end, leading to temporal aggregation that mixes periods of electoral pressure with post-election adjustments. Using administrative accounting records for 298 Chilean municipalities between 2008 and 2019—covering nearly 600 municipal elections—we show that this mismatch substantially attenuates estimated political budget cycles. When spending is measured over electoral years rather than calendar years, the estimated cycle is approximately three times larger. This attenuation arises because strategic post-election spending contractions, driven by annual budget constraints, are mechanically incorporated into calendar-year measures. High-frequency data further reveal that electoral responses are short-lived and concentrated at specific points within the electoral cycle, with systematic differences across spending categories reflecting variation in visibility, implementation lags, and electoral effectiveness. Overall, the results highlight the importance of reliable high-frequency fiscal data for accurately measuring political budget cycles and characterizing their within-year dynamics.
By Paulo Cox; Universidad de Talca
Presented by: Paulo Cox, Universidad de Talca
Session 24: Open Economy Macroeconomics August 28, 2026 9:00 to 11:00 Location: UTalca - 807
The Financial Channel of Tax Amnesty Policies Abstract Over the past two decades, more than 40 countries have introduced tax amnesties to encourage the repatriation of previously hidden assets. While existing research focuses on their direct impact on government revenue, this paper highlights a new channel: asset repatriations can expand the domestic financial sector and generate spillovers to private-sector firms. We study Argentina’s 2016 Tax Amnesty, one of the largest asset disclosure episodes in history, which triggered a massive inflow of savings into domestic banks, predominantly in U.S. dollars, effectively doubling dollar deposits within a single quarter. These large-scale capital inflows provide a novel source of variation to study how banks respond and how foreign-currency liquidity shocks propagate to firms. We leverage the heterogeneous exposure of banks and firms to identify causal effects: banks with higher exposure significantly increased lending, and connected firms experienced greater borrowing, along with increases in imports of intermediate inputs, exports, and employment. To interpret these results and assess the aggregate implications, we develop a general equilibrium model with heterogeneous banks and multi-currency financial frictions. The model delivers a causal estimate of the firm-level peso-dollar substitution elasticity and generates a novel link between foreign-currency deposit shocks and firms’ input mix decisions. Counterfactual analysis implies that the tax amnesty increased GDP by 0.4%
By Paula Donaldson; UCSD    Ezequiel Garcia Lembergman; Pontifical Catholic University of Chile    Leticia Juarez; Inter-American Development Bank (RES)
Presented by: Ezequiel Garcia Lembergman, Pontifical Catholic University of Chile
Sovereign Wealth Funds and Optimal Foreign Reserves Abstract We study the interaction of sovereign wealth funds (SWFs) and the accumulation of foreign reserves in open economies prone to financial crisis. A fiscal authority that chooses stabilization and long-term SWFs interacts with a central bank that accumulates foreign reserves. During a crisis, a stabilization SWF supports households via transfers, and foreign reserve banks with liquidity to mitigate negative balance sheet effects of the shock. Each policy has an effect on the tax burden of households to support government expenditure and the cost of issuing reserves. Thus, each authority faces a tradeoff between the benefits and costs of their instruments, without internalizing the effects of the other’s actions. A negative relationship between optimally setting a SWF, and its size, and the accumulation of foreign reserves emerges endogenously. We provide cross-country evidence supporting these results using a novel panel dataset on the presence and the type of SWFs.
By Humberto Martinez; Universidad de Chile
Presented by: Humberto Martinez, Universidad de Chile
Foreign Exchange Intervention in Dollarized Economies: A Quantitative Evaluation Abstract This paper assesses the role of foreign exchange intervention (FXI) in stabilizing financially dollarized economies in response to U.S. monetary policy shocks. Using a panel VAR model, we find that U.S. monetary policy shocks have more contractionary effects in emerging economies with high levels of financial dollarization than in non-dollarized economies. We also show empirically that when FXI is deployed a financially dollarized economy displays lower macroeconomic volatility. Motivated by this evidence, we estimate a quantitative small open economy model with foreign-currency debt and balance sheet effects to conduct counterfactual FXI policy experiments. The simulations show that dollarization exacerbates the contractionary effects of U.S. monetary policy shocks by raising corporate borrowing costs. Conventional monetary policy alone has limited effectiveness in stabilizing a financially dollarized economy. However, when complemented with FXI, the policy mix can significantly reduce borrowing costs and dampen output volatility. The quantitative results remain robust under alternative shocks, FXI rules, and constraints on foreign exchange reserves availability.
By Juan Medina; Universidad Adolfo Ibañez
Presented by: Juan Medina, Universidad Adolfo Ibañez
Session 25: Econometrics August 28, 2026 9:00 to 11:00 Location: UTalca - Salon Ejecutivo
Generalized Bayesian Composite Quantile Regression with an Application to Equity Premium Forecasting Abstract Composite quantile regression (CQR) is a robust and efficient estimator under heavy-tailed and contaminated errors. Existing Bayesian extensions rely on working likelihoods that require latent-variable augmentation and can deliver poorly calibrated credible intervals. We develop generalized Bayesian CQR, which exponentiates the composite quantile loss directly, targeting the same objective as frequentist CQR. Because generalized Bayes replaces point optimization with posterior averaging over the loss surface, it is particularly advantageous under heavy-tailed errors where the composite quantile loss flattens near its minimum. In generalized Bayes posterior dispersion depends on a learning rate that we calibrate by matching marginal variances to their frequentist sandwich counterparts. The resulting credible intervals achieve near-nominal coverage in cross-sectional settings and substantially close the undercoverage of HAC-based intervals under serial dependence. The calibration has a closed-form solution under flat priors and extends to normal and spike-and-slab LASSO priors for shrinkage and variable selection. Sampling uses standard Metropolis-Hastings with no latent variables, achieving roughly 100-fold computational gains over likelihood-based Bayesian CQR. Monte Carlo experiments show competitive or improved point estimation relative to frequentist CQR, reliable coverage, and robust variable selection across Gaussian, heavy-tailed, and contaminated error distributions. An equity premium forecasting application demonstrates that the efficiency and robustness gains translate into economically meaningful improvements in out-of-sample portfolio performance.
By Nicolas Hardy; Universidad Diego Portales    Dimitris Korobilis; University of Glasgow
Presented by: Nicolas Hardy, Universidad Diego Portales
Sensitivity Analysis for Instrumental Variables Under Joint Relaxations of Monotonicity and Independence Abstract In this paper I develop a breakdown frontier approach to assess the sensitivity of Local Average Treatment Effects (LATE) estimates to violations of monotonicity and independence of the instrument. I parametrize violations of independence using the concept of $c$-dependence from Masten & Poirier (2018) and allow for the share of defiers to be greater than zero but smaller than the share of compliers. I derive identified sets for the LATE and the Average Treatment Effect (ATE) in which the bounds are functions of these two sensitivity parameters. Using these bounds, I derive the breakdown frontier for the LATE, which is the weakest set of assumptions such that a conclusion regarding the LATE holds. I derive consistent sample analogue estimators for the breakdown frontiers and provide a valid bootstrap procedure for inference. Monte Carlo simulations show the desirable finite-sample properties of the estimators and an empirical application shows that the conclusions regarding the effect of family size on female labor force participation from Angrist & Evans (1998) are highly sensitive to violations of independence and monotonicity.
By Pedro Picchetti
Presented by: Pedro Picchetti,
A novel out-of-sample trading-based test of predictability Abstract We show that a simple modification of a trading based test of predictability provides interesting advantages in terms of size and power relative to several tests available in the literature. Our statistic is called Weighted Straightforward Excess Profitability (WSEP) test, and it is built by adding positive weights to the simple trading rule that issues a buying signal whenever the available forecast indicates an upward movement in the underlying asset, and issues a selling signal otherwise. We use weights based on the magnitude of our forecast using either an exponential or folded normal cumulative distribution function. Our Monte Carlo simulations indicate that our test is well-sized, even in DGPs displaying heteroskedasticity, where other traditional tests are severely oversized. Additionally, our test exhibits reasonable power, and in many cases, it outperforms its natural competitors. Finally, we present an empirical illustration based on the commodity-currencies literature, in which our approach detects more predictability than other competing tests, which is consistent with the improvement in power detected in our simulations.
By Ean Paredes; University of Chile, Business Department    Pablo Pincheira; Adolfo Ibáñez University
Presented by: Pablo Pincheira, Adolfo Ibáñez University
A GMM Estimator for the Spatial Autoregressive Probit Model Using Reduced-Form Instruments Abstract This paper proposes a generalized method of moments approach for estimating spatial autoregressive probit models with latent spatial dependence. We first consider a general GMM estimator based on standard spatial instruments. We then develop a feasible reduced-form-instrument estimator, where the additional instrument is motivated by the reduced form of the latent model and is constructed using a preliminary consistent estimator. The asymptotic theory is derived under increasing-domain asymptotics using the spatial near-epoch dependence framework. We establish consistency and asymptotic normality of the baseline GMM estimator and show that the feasible reduced-form-instrument estimator is asymptotically equivalent to its infeasible counterpart. The results accommodate random regressors and spatially dependent binary outcomes, but rely on maintained identification, moment, and dependence conditions sufficient for the available NED law of large numbers and central limit theorem. The paper provides a tractable framework for GMM estimation and inference in spatial autoregressive probit models and clarifies the regularity conditions required for its validity.
By Gianfranco Piras; Catholic University of America    Mauricio Sarrias; Universidad de Talca
Presented by: Mauricio Sarrias, Universidad de Talca
Session 26: Labor Markets, Regulation and Informality August 28, 2026 14:00 to 16:00 Location: UTalca - FEN1
The value of a formal job Abstract Starting a career in a formal versus an informal job significantly impacts outcomes due to differences in job productivity and security, human capital accumulation, and offer arrival rates. In this paper, I attempt to measure the value of a formal job and assess the relative importance of each factor. I propose a frictional labor market model with two sectors, where firms are heterogeneous in productivity and job security, while workers search off- and on the-job and accumulate human capital. I calibrate the model using survey and administrative data from Chile. I find that, on average, the value of a formal job is equivalent to a lump sum payment of 6.2 monthly minimum wages. Formal jobs lead, as a lower bound, to 7.8% higher earnings after five years. The main determinants of wages are productivity, human capital accumulation, and the minimum wage, while job security and offer arrival rates play secondary roles.
By Adolfo Fuentes Werlinger; Universidad Diego Portales
Presented by: Adolfo Fuentes Werlinger, Universidad Diego Portales
When the Inspector Knocks at the Door: Effects of Labor Inspections in Brazil Abstract This paper studies how labor inspections affect workers, using linked employer-employee data from Brazil. While inspections reduce employment at the establishment level by about 8\% within three years, driven primarily by lower hiring, we show that their main impact operates through worker reallocation across firms. At the worker level, inspections generate sharply asymmetric dynamics: workers who remain at inspected establishments experience persistently slower wage growth, while those who move to other employers gain wages by transitioning to firms with higher wage premiums, as measured by establishment fixed effects in an AKM framework. Wage gains among leavers are concentrated among lower-education and lower-wage workers, those with the greatest scope for upward mobility in a frictional labor market. We interpret these patterns as evidence that labor inspections reshape the allocation of workers across firms, rather than reducing overall employment. Consistent with this view, inspections affect wage-setting within firms while inducing mobility toward higher-wage employers for a subset of workers. In addition, we show that firm-level responses reflect both deterrence and punishment: even non-penalized establishments contract employment and hiring, while sanctions amplify effects, particularly on wages. Together, the results suggest that labor inspections impose costs on inspected establishments while generating asymmetric distributional consequences for workers—dynamics that worker-level analyses reveal but firm-level or aggregate employment measures do not capture.
By Isis Lira; PUC-Rio    Ricardo Freguglia; Federal University of Juiz de Fora    Gustavo Gonzaga; PUC-Rio    Tomas Guanziroli; Universidad Andrés Bello    Laura Schiavon; Federal University of Juiz de Fora
Presented by: Tomas Guanziroli, Universidad Andrés Bello
Sources and Implications of Labor Market Informality: The Case of Minimum Wage Policies Abstract This paper develops and estimates a search and matching model of the labor market that reproduces the empirical regularities observed when a binding mandatory minimum wage is imposed in markets with high informality. The model features four labor market states—unemployment, formal salaried employment, informal salaried employment, and self-employment—and lets firms choose endogenously whether to post formal or informal vacancies. Estimated on Colombian data, it delivers measures of aggregate worker welfare that are better suited than wage distributions or employment rates for evaluating minimum wage policies, and it allows for counterfactual experiments that account for equilibrium effects. We find that the impact of the policy is non-monotonic: a moderate increase in the minimum wage raises worker welfare, whereas a large increase lowers it, pushing workers out of formal jobs into informal salaried work and self-employment and reducing aggregate production. These effects are driven largely by firms’ endogenous vacancy-posting decisions, while the amenity value of self-employment cushions the adjustment. The results imply that the welfare-maximizing minimum wage is positive and close to current levels, and that worker welfare and aggregate output respond differently to the policy, making optimal design a genuine trade-off.
By Mauricio Tejada; Universidad Diego Portales
Presented by: Mauricio Tejada, Universidad Diego Portales
Macro-Level Skill Mismatch in the Mexican Labor Market: Informality as a Key Adjustment Margin Abstract This paper examines how macro-level skill mismatch shapes labor market adjustment in Mexico. Using quarterly microdata from the ENOE for 2005--2024, we construct a Skill Mismatch Index measuring imbalances between the skill composition of labor supply and salaried labor demand across Mexico's 32 states, and exploit geographic variation in a dynamic fixed-effects framework with state-specific linear trends. We find that skill mismatch leaves labor market stocks largely unaffected. Instead, adjustment occurs through reallocation within employment: higher mismatch increases transitions from formal to informal work, reduces transitions into formality, and generates a net shift toward informality robust across specifications. Self-employment absorbs workers under moderate imbalances but cedes to informality when mismatch is severe. Average wages fall with mismatch, reflecting composition rather than within-sector wage compression. Decomposing the index reveals that informalization is concentrated among excess supply of university-educated workers. In labor markets with large informal sectors, mismatch is associated with where workers are employed and at what wage --- not whether they are employed --- emphasizing the importance of demand-side policies as complements to educational expansion.
By Diana MacDonald; Banco de México    Benjamin Elam Rodriguez Alcaraz; Banco de México
Presented by: Diana MacDonald, Banco de México
Session 27: Inflation & Expectations August 28, 2026 14:00 to 16:00 Location: UTalca - FEN2
Inflation Illiteracy: What Does Microdata Reveal About Chilean Consumers? Abstract Inflation illiteracy--the inability to process inflation information to form meaningful expectations on which economic and financial decisions rest--affects economic outcomes. This note analyses microdata for Greater Santiago, linking one-year-ahead inflation expectations to socioeconomic and demographic covariates and to macroeconomic indicators. Linear models of inflation expectation formation are estimated, augmented with an inflation-illiteracy indicator (with interactions), whereas illiteracy is examined using binary-outcome regressions. Three findings stand out. First, higher education lowers expectations while women report higher levels; age is mildly U-shaped; expectations rise with own growth outlook but fall with realised growth and higher wages; headline inflation, housing and credit costs push them up. Secondly, illiteracy is a first-order driver of expectations, elevating them and attenuating the moderating influence of education and income. Thirdly, illiteracy is more likely among lower socioeconomic strata, the less educated, and women, and is amplified by adverse macroeconomic and financial conditions. Findings point to tailored communication and financial-literacy efforts focused on populations with higher measured illiteracy and during adverse macro-financial conditions; improving the clarity, consistency, and accessibility of messages can reduce misperceptions.
By Carlos Medel; Central Bank of Chile and PUC-Chile
Presented by: Carlos Medel, Central Bank of Chile and PUC-Chile
Determinants of Inflation Expectations De-anchoring: An Empirical Study in Chile Abstract This paper investigates the determinants of inflation expectations de-anchoring and re-anchoring in Chile using monthly survey responses from more than 100 private forecasters over nearly 23 years. The analysis distinguishes between positive and negative de-anchoring from the inflation target and examines both the factors associated with de-anchoring and those triggering transitions into and out of de-anchored states. Using fixed-effects panel logit estimations, the results indicate that expectations drifting above the inflation target are influenced by a broader range of macroeconomic and informational factors than expectations drifting below target. Variables related to the monetary policy rate significantly affect both types of de-anchoring, with the estimated patterns being consistent with a central bank information effect. In addition, disagreement regarding future inflation, particularly at the medium-term horizon, plays a central role in explaining positive de-anchoring and the persistence of above-target inflation expectations. The findings suggest that central bank communication and the management of inflation expectations are especially important during periods characterized by elevated inflation uncertainty and disagreement among forecasters.
By Michael Pedersen; Universidad Adolfo Ibáñez
Presented by: Michael Pedersen, Universidad Adolfo Ibáñez
Energy Price Pass-Through to Core Inflation: An Empirical Analysis Abstract The global economy experienced rising inflation following the COVID-19 pandemic and the Russia--Ukraine war, significantly affecting markets and energy prices. The recent conflict in the Middle East has also generated large energy price shocks, affecting the outlook for inflation and monetary policy across the globe. This study examines the pass-through of energy price shocks to core inflation across advanced economies, Latin America, and other emerging regions since 2000. Our findings indicate that the unconditional pass-through from energy prices to core inflation is higher in Latin America than in advanced economies and other emerging markets regions. Moreover, when conditioning on inflation expectations, the results show that during periods of elevated inflation expectations, Latin America exhibits a significantly stronger pass-through of energy prices to core inflation than advanced economies and Emerging Europe. Specifically, a 10-percent increase in energy prices is associated with a cumulative rise in core inflation of approximately 2.7 percentage points over ten quarters in Latin America when the economy is in high level of inflation expectations, roughly fifteen times the 0.1-0.2 percentage points estimated for advanced economies under the same conditions. Strikingly, this differential nearly vanishes when expectations are low, with pass-through estimates close to zero in both groups of countries, underscoring that expectation de-anchoring, rather than the energy shock itself, is the key amplifier of inflation persistence in the region. By contrast, conditioning on headline inflation yields weaker and more heterogeneous evidence of state-dependent energy price pass-through across regions. These findings underscore the importance of inflation expectations in shaping the transmission of energy price shocks to core inflation, with important implications for the design and timing of monetary policy responses.
By Vicente Castillo; Universidad de Chile    Juan Pablo Medina; Adolfo Ibáñez University
Presented by: Vicente Castillo, Universidad de Chile
Oil Price Shocks and Heterogeneous Inflation Responses Across Households Abstract This paper studies the dynamic distributional inflation effects of oil price shocks. Using household-level data from Chile and externally identified oil supply shocks, we document a non-monotonic response of cumulative inflation across income groups. While all households experience higher inflation following an oil price shock, high-income households are more affected on impact, whereas low-income households face more persistent inflationary pressures at medium horizons as price increases propagate across sectors. To interpret these patterns, we develop a two-sector Two-Agent New Keynesian (TANK) model with heterogeneous consumption baskets, asymmetric technological exposure to oil, and sector-specific price rigidities. The model shows that heterogeneous expenditure shares are necessary but not sufficient to account for these dynamics: the non-monotonic pattern of inflation inequality is shaped by the interaction between sectoral asymmetries and nominal adjustment frictions.
By Felipe Martínez; Central Bank of Chile
Presented by: Felipe Martínez, Central Bank of Chile
Session 28: Banking & Credit Markets August 28, 2026 14:00 to 16:00 Location: UTalca - 806
Bank Branches and the Allocation of Capital across Cities Abstract We study how the location of bank branches and imperfect competition in credit markets affect the allocation of capital across cities, using data from Chile. We show that bank-level deposit shocks increase lending and lower interest rates, with stronger effects in more competitive local markets. We develop and estimate a quantitative spatial model with oligopolistic banks and frictional interbank lending, finding that spatial misallocation from market power reduces GDP by 0.52 pp while the impact of interbank frictions is negligible. Bank mergers create a trade-off between improved spatial financial integration and the welfare costs of reduced competition, which are stronger if the merging banks overlap in many cities.
By Olivia Bordeu; UC Berkeley    Gustavo Gonzalez; Pontificia Universidad Católica de Chile    Marcos Sora; University of Illinois-Urbana Champaign
Presented by: Gustavo Gonzalez, Pontificia Universidad Católica de Chile
Housing Credit Guarantees as a Policy-Induced Relaxation of Regulatory Constraints: Evidence from Chile Abstract This paper examines Chile’s FOGAES housing program, a temporary state guarantee that relaxed the regulatory burden of originating high-LTV mortgages to first-time homebuyers. The program covered the portion of eligible loans above 80% LTV, thereby making them, from a regulatory perspective, similar to loans originated at the 80% threshold. Using administrative data on mortgages, property transactions, and labor-market outcomes, we show that the program reduced interest rates on eligible high-LTV loans by about 8 basis points, with larger effects among banks that used the guarantee more intensively. Given incomplete program take-up, a back-of-the-envelope calculation that scales the reduced-form estimates by guarantee coverage implies an effect of roughly 28–30 basis points for loans induced into coverage. We also find sizable effects on mortgage origination: the program increased high-LTV lending primarily by generating additional loans above the 80% LTV threshold, with a smaller role for reallocation from loans below the threshold. The results show that regulatory costs at leverage thresholds affect both mortgage credit pricing and allocation.
By Pedro Roje; Central Bank of Chile    Felipe Martinez; NA
Presented by: Pedro Roje, Central Bank of Chile
Credit Supply and Firm Pricing: Evidence from Matched Bank-Firm-Product Data Abstract This paper estimates the effects of credit supply shocks on firm pricing and real outcomes. We combine firm-bank credit data with firm-product-level data to control for demand factors in the estimation: we compare changes in sales, quantities, and prices of the same product across firms borrowing from different banks, exposed to varying credit supply shocks. Firms connected to banks expanding their credit supply receive more credit, at lower interest rates and longer maturities. These firms subsequently respond by decreasing prices and increasing sales and quantities. Also, these firms increase investment and employment. These effects persist over several quarters. The findings are consistent with firms responding to improved credit access by expanding productive capacity and adjusting their pricing to attract customers.
By Sofia Bauducco; Central Bank of Chile    Ramiro de Elejalde; Central Bank of Chile    Marco Rojas; Central Bank of Chile    Alonso Villacorta; UC Santa Cruz    Lucciano Villacorta; Central Bank of Chile
Presented by: Ramiro de Elejalde, Central Bank of Chile
Firm Shocks, Workers Earnings and the Extensive Margin Abstract We study the effect of idiosyncratic firm-level shocks on the earnings and employment trajectories of workers. We use a matched employer-employee census between 2007 and 2019 for Chile, a developing economy with a significant degree of earnings inequality. Our results show that the pass-through of changes in firm productivity on the wages of continuing workers can be significant, especially for large negative shocks, and that the effects vary with labor market conditions. We show that responses along the extensive margin of employment play a relevant role, as workers face a significant risk of displacement, associated with potentially large and persistent earnings losses. The last section of the paper combines these results to calculate the overall earnings risk associated with productivity shocks. Our findings suggest that a more complete assessment of how firms transfer risks to workers must not only focus on job stayers, but also consider the earnings implications for workers who leave the firm after a negative shock.
By Alvaro Castillo; Central Bank of Chile    Ana Sofia Leon; U. Diego Portales    Matias Tapia; Central Bank of Chile
Presented by: Ana Sofia Leon, U. Diego Portales
Session 29: Sesión organizada: Commodity Markets and Expectations August 28, 2026 14:00 to 16:00 Location: UTalca - SALON EJECUTIVO
Calm news regimes and price discovery: Evidence from the Chilean peso and copper futures Abstract We examine how the public commodity-news environment shapes connectedness between the Chilean USD/CLP spot market and international copper futures. Given Chile’s position as the world’s leading copper exporter, USD/CLP is widely regarded as a commodity currency. Using proprietary transaction-level USD/CLP data from the Central Bank of Chile, high-frequency COMEX copper futures data, and Bloomberg news coverage summarized into daily factors, we show that calmer commodity-news regimes are associated with a stronger FX–copper link, with the informative order flow of end-users serving as a key driver of this relationship. Specifically, we find that a one-unit increase in our news-tranquility measure is associated with 5\% and 3\% standard-deviation increases in our TVP-VAR connectedness measure and correlation-based connectedness measure, respectively. Furthermore, local informed-trading measures rise by 17 to 18 percentage points per unit of imbalance in international copper futures order flow when end-users are selling USD in the local market.
By Francisco Pinto; Central Bank of Chile
Presented by: Francisco Pinto, Central Bank of Chile
Gasoline Prices and Higher-Order Moments of Inflation Expectations Abstract We analyze the effects of gasoline price shocks on the distribution of one-year inflation expectations in the United States. Although most existing research has focused on the median, we extend the analysis to higher-order moments: standard deviation, skewness, and kurtosis. Using a time-varying parameter vector autoregression with stochastic volatility, we find that gasoline price shocks influenced not only the median but also the dispersion, asymmetry, and tail behavior of inflation expectations. These effects were especially pronounced during the global financial crisis and the COVID-19 pandemic—skewness rose, indicating increased perceived risk of high inflation outcomes, while kurtosis declined, suggesting a narrowing of the distribution despite elevated volatility. The magnitude and significance of these effects varied over time, highlighting the importance of modeling the temporal dynamics of inflation expectations in response to gasoline price shocks.
By Jose Barrales-Ruiz; Universidad San Sebastián    Gabriel Pino; Universidad Diego Portales
Presented by: Gabriel Pino, Universidad Diego Portales
Can Uncertainty affect Extreme Events in the Oil Market?: A MIDAS Touch to Dynamic POT Models Abstract This study introduces a novel econometric framework for forecasting extreme events in oil markets by incorporating macrofinancial uncertainty indicators into a dynamic peak over-threshold (POT) model within a mixed-frequency setting. Based on three decades of daily returns from two major global oil benchmarks, WTI and Brent, we provide robust empirical evidence that rising uncertainty is signicantly associated with the frequency and magnitude of extreme returns. We utilize the Economic Policy Uncertainty index, Equity Market Volatility Tracker: Commodity Markets, and Jurado-Ludvigson-Ng 1-month ahead macroeconomic uncertainty index to capture different dimensions of uncertainty. These insights are derived through our novel framework, the autoregressive conditional MIDAS-POT (AC-MIDAS-POT), which integrates dynamic specifications for inter-exceedance times and magnitudes of extreme oil returns with the MIDAS components to account for macroeconomic and financial information. The AC-MIDAS-POT model signicantly outperforms the VaR forecasts from the GARCH-MIDAS and GARCH-MIDAS-EVT models. This novel modeling framework offers a robust tool for forecasting tail risk in financial markets and provides valuable insights for investors and policymakers to forecast and mitigate the impact of extreme returns.
By Rodrigo Herrera; Universidad de Talca
Presented by: Rodrigo Herrera, Universidad de Talca
Session 30: Industrial Organization & Markets August 28, 2026 14:00 to 16:00 Location: UTalca - 805
Retail Consolidation and Rival Responses: Evidence from a Supermarket Merger Abstract We provide an ex-post evaluation of the 2013 merger between Ta-Ta and Multi Ahorro in Uruguay's supermarket industry, examining adjustments in prices, product variety, vertical positioning, and the responses of non-merging rivals. Using product-level price data and store-level assortment information, difference-in-differences and event-study estimates show a persistent 1–1.5 percent price increase and a contraction in product variety within the merged firms, with no robust evidence of vertical upgrading. We document a lead-follow dynamic in pricing in which merging firms adjust prices during the announcement window while large non-merging competitors raise prices more strongly after completion. Exploiting pre-merger geographic variation in rivals' exposure to the merging parties, we show that the rival price response is concentrated in locally exposed stores—a spatial gradient that is difficult to reconcile with national cost shocks and is consistent with strategic complementarity in pricing. Variety contractions, in contrast, are uniform across rival locations, consistent with chain-level decision-making. The joint pattern points to a relaxation of competitive pressure operating through both within-firm and rival-response channels in differentiated retail markets.
By Fernando Borraz; dECON- FCS-UdelaR    Flavia Roldán; Universidad ORT Uruguay
Presented by: Fernando Borraz, dECON- FCS-UdelaR
Monopsony Power Dynamics during Trade Liberalization and Rising Employment Protection Abstract How much monopsony power do firms exert in emerging economies, and how does trade reshape it? Using plant-level Chilean manufacturing data for 1990–2018, we estimate firm-level wage markdowns via a production-function approach and document that workers’ take-home share of marginal revenue product nearly doubled—from 40 to 70 cents on the dollar. A Bartik instrument combining pre-determined origin-country import shares with shifts in those countries’ export capacity to non-Latin American destinations identifies the causal effect of trade: a one percent increase in import penetration raises industry-level markdowns with a long-run elasticity of approximately 0.09, operating not on impact but through a gradual adjustment process in which product market competition first compresses markups, then induces firm exit, and progressively reallocates employment toward larger firms with greater wage-setting power. The aggregate decline in markdowns, however, is driven by institutional forces—rising minimum wages, expanded education, and strengthened labor regulation—that affected all industries simultaneously. A structural model with oligopsonistic labor markets and Nash bargaining rationalizes both forces: calibrated bargaining power rises fourfold (β = 0.14 to β = 0.61). Despite trade-induced increases in markdowns, Chile’s rapid liberalization generated welfare gains of 51%, compared with 32.5% under a gradual counterfactual. An unprecedented result arises from our model: trade openness and institutional reform are complements, as their joint welfare effect exceeds the sum of individual effects by approximately 16 percentage points.
By Ignacio Horta; University of Chile    Alejandro Micco; University of Chile
Presented by: Ignacio Horta, University of Chile
App Store Fees and App Business Models Abstract We study how an app store’s decision about its ad-valorem fee affects the business models chosen by app developers. We derive optimal choices for the app store and their effects on industry profits, consumers, and total welfare. Surprisingly, the platform’s optimal ad-valorem fee may be lower than the socially optimal one. Our findings provide insights into recent antitrust disputes and regulatory debates.
By José Ignacio Heresi; Universidad Alberto Hurtado
Presented by: José Ignacio Heresi, Universidad Alberto Hurtado
Tradable Consumption Rights: An Experimental Study of Behavior and Redistribution Abstract Market-based mechanisms are increasingly proposed as tools for redistribution in environments with limited information. This paper studies behavior and distributional outcomes in a novel market institution: tradable consumption rights. Under this mechanism, individuals are required to have money and consumption rights to purchase goods, and these rights can be traded in a parallel market. Although the mechanism replicates redistributive transfers in equilibrium, we show that its performance depends on how individuals adapt to dual constraints and market complexity. We design and implement a laboratory experiment that embeds a consumption economy into a multi-unit double-auction market for consumption rights, progressively increasing institutional complexity across the experiment. We document substantial heterogeneity in agents' behavior, learning frictions, and high volatility when the full policy, with endogenous pricing, is implemented. Despite these frictions, inequality declines sharply as the experiment progresses, and subjects' utility levels fall but then weakly increase with learning. Overall, the results highlight how learning dynamics and market design shape redistribution in decentralized markets.
By Sofia Correa; University of Chile    Bárbara Flores Arenas; Universidad Mayor - MICARE    Francisco Martínez Concha; Universidad de Chile
Presented by: Bárbara Flores Arenas, Universidad Mayor - MICARE
Session 31: Political Economy and Development August 28, 2026 14:00 to 16:00 Location: UTalca - FEN3
Long-Run Exposure to Centralized Institutions and Contemporary Conflict: Evidence from Sub-Saharan Africa Abstract We examine empirically the role of historical political centralization on the likelihood of contemporary civil conflict in Sub-Saharan Africa. Combining a wide variety of historical sources, we construct an original measure of long-run exposure to statehood at the sub-national (1 × 1◦ grid) level. Within-country OLS shows a robust negative association between state history and modern conict, and two-stage least-squares estimates using the timing of the local Neolithic transition as an instrument remain negative, large in magnitude, and significant. The relationship is concentrated under indirect (British) colonial rule, consistent with a model of legitimacy accumulation that persists when colonial administration leaves pre-colonial institutions in place and depreciates when they are dismantled. Using Afrobarometer micro-data, we further show that deeper homeland state history predicts stronger contemporary perceptions of the legitimacy stock it builds: traditional leaders are seen as more influential in local governance, and respondents see their own ethnic group as more politically influential nationally.
By Emilio Depetris-Chauvin; PUC Chile
Presented by: Emilio Depetris-Chauvin, PUC Chile
The impacts of restrictions to individual rights on Indigenous lands Abstract Many countries in the Americas impose restrictions on Indigenous land transactions to preserve Indigenous ownership, but these policies may inhibit economic growth. This paper evaluates the impact of Chile's 1993 Indigenous Law, which restricts the transfer, lease, and mortgaging of land in Mapuche territories, limiting transactions to Mapuche buyers. Using property records and transaction data, we find that the law has slowed Mapuche territorial loss, but imposed economic costs as reflected in lower capitalization of urban growth into land values. Moreover, its effectiveness has declined over time, coinciding with a reduction in properties registered in the Public Registry of Indigenous Territories (PRIT), a key enforcement tool. Analysis of property sales following owner deaths shows that listed properties experience smaller reductions in Indigenous ownership, with no evidence that PRIT reduces sales rates relative to unlisted properties. Using remotely sensed data and two complementary identification strategies, we reject meaningfully large impacts of PRIT on land use or productivity. Taken together, the results indicate that economic costs arise from de jure restrictions---even under imperfect enforcement---while strengthening enforcement through PRIT achieves the law's protective goals without imposing additional economic costs. This suggests a stark policy trade-off: either forego restrictions, or fully enforce them to realize their protective effects.
By Robert Heilmayr; University of California, Santa Barbara    Dany Jaimovich; University of Talca    Felipe Jordán; Pontificia Universidad Catolica de Chile
Presented by: Felipe Jordán, Pontificia Universidad Catolica de Chile
Immigration and Fertility: Evidence from Chile Abstract The rapid decline in fertility rates represents one of the most profound demographic shifts of the 21st century, with critical implications for fiscal sustainability and long-term economic growth. As native fertility falls below replacement levels, immigration has emerged as a potential mechanism to mitigate population aging. This paper examines the causal impact of immigration on fertility in Chile, leveraging two distinctive features: one of the world's steepest fertility declines—from 2.7 to 1.16 children per woman between 2000 and 2023—and a massive immigration wave that increased the foreign-born population from 1.2\% to 8\%. Using Census data (2017, 2024) and a shift-share instrumental variables strategy, I find that a 10\% increase in the migrant stock raises total births by 1.3\%, driven entirely by immigrant fertility. Critically, I find no spillover effects on native Chilean fertility, suggesting immigration operates purely through compositional effects rather than altering native fertility decisions.
By Patricio Dominguez; PUC Chile
Presented by: Patricio Dominguez, PUC Chile
Friends to win, friends to govern. Strategic convergence of electoral platforms in local elections Abstract This paper examines the factors influencing the strategic convergence of electoral platforms in local elections, with a focus on the role of government majorities in city councils. In Colombia, elected mayors must present a DP to the council for approval, creating potential trade-offs between honoring electoral promises and ensuring governability. Using a unique dataset from the 2019 Colombian municipal elections, I analyze the manifestos and DPs of elected mayors by applying text mining techniques and a regression discontinuity design to measure deviations from their electoral promises. The results highlight three key findings. First, mayors from electoral coalitions exhibit greater consistency with their campaign promises compared to those from single-party platforms, suggesting that coalition dynamics constrain deviations to balance internal agreements. Second, ideologically extreme mayors are less likely to deviate from their original platforms, even when governability pressures arise, as they prioritize ideological consistency over political flexibility. Third, the presence of the runner-up in the council leading a hard opposition does not significantly alter mayoral behavior. This study contributes to the literature by illustrating how institutional frameworks shape politicians' post-election behavior, particularly in local governance. The findings parallel dynamics observed in legislative negotiations but applied to the municipal level, where mayors must navigate coalition constraints and council dynamics to balance electoral promises with the practical demands of governance. This highlights the critical role of coalition politics and institutional arrangements in proportional representation systems, where reconciling political feasibility with campaign commitments becomes essential for effective leadership.
By Alejandra Marín Díaz; Universidad de O'Higgins
Presented by: Alejandra Marín Díaz, Universidad de O'Higgins
Session 32: Microeconomics & Game Theory August 28, 2026 14:00 to 16:00 Location: UTalca - 807
Canonical Equilibria in Games with Flexible Information Acquisition Abstract This paper studies information games in which players choose experiments and privately observe conditionally independent signals before choosing their actions. Players incur an information cost that satisfies three natural properties. Uninformative experiments are costless, costs are continuous and convex in experiments, and (strictly) more information in Blackwell's sense is (strictly) more expensive. A pure strategy for each player is a pair consisting of an experiment and a behavioral strategy, which we call an information plan. We show that for every Nash equilibrium, there exists an equivalent equilibrium that is pure in information plans, signals recommend pure actions, and recommendations are followed. The equivalent Nash equilibrium preserves learning strategies, so information acquisition is pinned down almost everywhere. This canonical equilibrium provides a revelation principle for games with flexible information acquisition. We also establish the existence of a Nash equilibrium, derive sharp characterizations under mutual-information costs, and present an example in which improved information acquisition technology may reduce aggregate welfare.
By Alfonso Montes; Universidad Diego Portales
Presented by: Alfonso Montes, Universidad Diego Portales
Search Equilibrium in the Market for Goods Abstract How does trade emerge in the market for final consumption goods? We pro- pose a search equilibrium model for the trade of a homogeneous, indivisible final good. Sellers own the good and buyers do not, and they all might value consumption differently. The initial endowment asymmetry induces distinct properties of the search value functions: buyers’ search values are increasing in their consumption value, while sellers’ are constant because they give up consumption when they search. We characterize the steady-state search equilibrium, establishing ex- istence, and uniqueness. We show that equilibrium sorting precludes mismatch: conditional on meeting, trade happens (i.e., there are no failed trades). In a natural comparison to the frictionless Walrasian case, we find that frictions are analogous to a Pigouvian “search tax” that harms trades. This endogenous tax increases with search costs and bargaining asymmetries, which highlights how frictions dis- tort exchange. We show that another asymmetry emerges: efficiency is restored when buyer search costs vanish, but not when seller search costs do.
By JOSE CARRASCO; UNIVERSIDAD ADOLFO IBAÑEZ
Presented by: JOSE CARRASCO, UNIVERSIDAD ADOLFO IBAÑEZ
Cross-Validation Equilibrium Abstract We study strategic interaction when players delegate belief formation to predictive machine-learning (ML) systems trained on noisy data. In a static Bayesian game, each player’s ML agent predicts payoff-relevant objects—such as the state of nature or opponents’ actions—as a function of the player’s private signal. A player best-responds to this prediction. Crucially, the training sample is endogenous: it is drawn from the distribution of outcomes generated by all players’ ML-guided behavior. We introduce Cross-Validation Equilibrium (CVE), an equilibrium concept in which each ML agent selects a predictive model to minimize expected out-of-sample error using a random training sample. Random sampling implies random model choice and hence stochastic equilibrium behavior. We apply CVE to jury voting, a team effort game, and Cournot competition. In the jury game, voting becomes uninformative as the number of voters grows. In the team-effort game with strategic complementarities, model selection yields a feedback loop that endogenously coarsens beliefs and actions. This amplification implies that multiple CVE can exist despite linear bestresponse functions and a unique Nash equilibrium. In Cournot competition, there is unique CVE due to actions being strategic substitutes. Volatility of behavior is larger and payoffs are lower in CVE compared to Nash equilibrium. Furthermore, we relate CVE to existing equilibrium concepts. We show that Analogy Based Expectations Equilibrium with respect to the finest feasible partition emerges in the limit as the training sample becomes noiseless.
By Stephan Waizmann; Pontificia Universidad Católica de Chile
Presented by: Stephan Waizmann, Pontificia Universidad Católica de Chile
Dynamic Network Effects with Fear of Missing Out Abstract We study the dynamics of networks when agents experience fear of missing out (FOMO): using a popular product imposes negative externalities on those who abstain. We incorporate FOMO into a model of network externalities with timing frictions. FOMO can create product market traps, where agents consume a good they would collectively prefer not to exist. Some traps may still be constrained efficient. When the economy is trapped, large restrictions on use improve welfare, while small ones may reduce it. We show how experimental results can be mapped to our model and find that TikTok and Instagram are in inefficient equilibria.
By Bernardo Guimaraes; Sao Paulo School of Economics - FGV    Caio Machado; Pontificia Universidad Católica de Chile    Ana Elisa Pereira; Universidad de Los Andes, Chile
Presented by: Caio Machado, Pontificia Universidad Católica de Chile

 

This program was last updated on 2026-08-24 20:59:59 EDT