Exchange Rate Policy in Chile: From the Band to Floating and Beyond

As many countries worldwide, Chile has experienced virtually all the menu of options of exchange rate policies in the last 40 years – with the sole exception of giving up its national currency. The quest for a reasonable exchange rate policy has been inspired in part by the different goals that, through this four decades, policy makers have attempted to achieve with this policy. After almost of decade of co-existence of inflation targeting and an exchange rate band, in 1999 the Central Bank of Chile gave up the exchange rate band and replaced it with a policy of floating. This paper confronts two main questions: (a) Why was the band abandoned and, by the same token, why it took so long to do it and (b) How has the floating regime worked so far? This last question involves accounting for the possible appearance of “fear of floating” by the macroeconomic authorities, as well as evaluating the regime in three issues highlighted by the critics of exchange rate floating: passthrough to domestic prices, exchange rate volatility and balance sheet effects. In the final section, the paper illustrates the operation of the exchange rate system in the face of regional contagion effects.

Seasonal Cointegration in Money Demand

Empirical estimates of the demand for money exhibit standard problems: model instability, parameter inconsistency with regard to theoretical priors, and poor forecasting capabilities (Goldfeld and Sichel, 1990). This study explores to what extent an inadequate treatment of seasonality is responsible for the disappointing results obtained in the Chilean case. The empirical approach is to test for the presence of unit roots at different frequencies of money balances and their main determinants (annual, semiannual, and quartely). Once seasonal integration is established, seasonal-cointegration error-correction models allow us to trace long-term relationships between these variables in a more satisfactory way than standard models. The estimated seasonal-cointegration demand for money —which excludes any ad-hoc variable— is stable and robust for 1977-1999 and its forecasting capability is superior to that of traditional models.

Exchange Rate Policy in Chile: the Abandonment of the Band and the Floating Experience

As many countries worldwide, Chile has experienced virtually all the menu of options of exchange rate policies in the last forty years—with the sole exception of giving up its national currency. The quest for a reasonable exchange rate policy has been inspired in part by the different goals that, throughout these four decades, policymakers have attempted to achieve with this policy. After almost a decade of inflation targeting coexisting with an exchange rate band, in 1999 the Central Bank of Chile gave up the band and replaced it with a policy of floating. This paper deals with two main questions: (a) Why was the band abandoned and, by the same token, why did it last so long? and (b) How has the floating regime worked so far? The latter question involves accounting for the possible appearance of “fear of floating” by macroeconomic authorities, as well as evaluating the regime in three issues highlighted by the critics of exchange rate floating: passthrough to domestic prices, exchange rate volatility and balance sheet effects.

Monetary Policy and Transmission Mechanisms: New Elements for an old Debate

This article begins by reviewing the current state of the arts in monetary transmission, focusing on the empirical evidence for the Chilean case. Then, it highlights two aspects that have not been given much attention in previous studies, namely the evolution of the monetary policy impact on output and prices over the past decade, and its breakdown by sector. A basic uniequational model is estimated, in order to study i) temporary shifts in the effectiveness of monetary policy and ii) shifts in regimes occurred in the late nineties. Then, VAR models are used—similar to those of previous studies—to analyze impulse-response functions. Finally, a comparative analysis is made on the impact of monetary policy on various productive sectors, for which output and price variables are incorporated into the traditional VAR model.

Measurement of the cosmic ray spectrum above 4×10184{\times}10^{18} eV using inclined events detected with the Pierre Auger Observatory

A measurement of the cosmic-ray spectrum for energies exceeding $4{\times}10^{18}$ eV is presented, which is based on the analysis of showers with zenith angles greater than $60^{\circ}$ detected with the Pierre Auger Observatory between 1 January 2004 and 31 December 2013. The measured spectrum confirms a flux suppression at the highest energies. Above $5.3{\times}10^{18}$ eV, the "ankle", the flux can be described by a power law $E^{-\gamma}$ with index $\gamma=2.70 \pm 0.02 \,\text{(stat)} \pm 0.1\,\text{(sys)}$ followed by a smooth suppression region. For the energy ($E_\text{s}$) at which the spectral flux has fallen to one-half of its extrapolated value in the absence of suppression, we find $E_\text{s}=(5.12\pm0.25\,\text{(stat)}^{+1.0}_{-1.2}\,\text{(sys)}){\times}10^{19}$ eV.Comment: Replaced with published version. Added journal reference and DO

Energy Estimation of Cosmic Rays with the Engineering Radio Array of the Pierre Auger Observatory

The Auger Engineering Radio Array (AERA) is part of the Pierre Auger Observatory and is used to detect the radio emission of cosmic-ray air showers. These observations are compared to the data of the surface detector stations of the Observatory, which provide well-calibrated information on the cosmic-ray energies and arrival directions. The response of the radio stations in the 30 to 80 MHz regime has been thoroughly calibrated to enable the reconstruction of the incoming electric field. For the latter, the energy deposit per area is determined from the radio pulses at each observer position and is interpolated using a two-dimensional function that takes into account signal asymmetries due to interference between the geomagnetic and charge-excess emission components. The spatial integral over the signal distribution gives a direct measurement of the energy transferred from the primary cosmic ray into radio emission in the AERA frequency range. We measure 15.8 MeV of radiation energy for a 1 EeV air shower arriving perpendicularly to the geomagnetic field. This radiation energy -- corrected for geometrical effects -- is used as a cosmic-ray energy estimator. Performing an absolute energy calibration against the surface-detector information, we observe that this radio-energy estimator scales quadratically with the cosmic-ray energy as expected for coherent emission. We find an energy resolution of the radio reconstruction of 22% for the data set and 17% for a high-quality subset containing only events with at least five radio stations with signal.Comment: Replaced with published version. Added journal reference and DO

Measurement of the Radiation Energy in the Radio Signal of Extensive Air Showers as a Universal Estimator of Cosmic-Ray Energy

We measure the energy emitted by extensive air showers in the form of radio emission in the frequency range from 30 to 80 MHz. Exploiting the accurate energy scale of the Pierre Auger Observatory, we obtain a radiation energy of 15.8 \pm 0.7 (stat) \pm 6.7 (sys) MeV for cosmic rays with an energy of 1 EeV arriving perpendicularly to a geomagnetic field of 0.24 G, scaling quadratically with the cosmic-ray energy. A comparison with predictions from state-of-the-art first-principle calculations shows agreement with our measurement. The radiation energy provides direct access to the calorimetric energy in the electromagnetic cascade of extensive air showers. Comparison with our result thus allows the direct calibration of any cosmic-ray radio detector against the well-established energy scale of the Pierre Auger Observatory.Comment: Replaced with published version. Added journal reference and DOI. Supplemental material in the ancillary file

Database of spatial distribution of non indigenous species in Spanish marine waters

Research in marine Spanish waters are focused on several actions to achieve an effectively management on protected areas, with the active participation of the stakeholders and research as basic tools for decision-making. Among these actions, there is one about the knowledge and control on NIS. One of its objectives is the creation of NIS factsheets, which are going to be added to the National Marine Biodiversity Geographical System (GIS) providing complementary information about taxonomic classification, common names, taxonomic synonyms, species illustrations, identification morphological characters, habitat in the native and introduced regions, biological and ecological traits, GenBank DNA sequences, world distribution, first record and evolution in the introduced areas, likely pathways of introduction, effects in the habitats and interaction with native species, and potential management measures to apply. The database will also provide data for (1) the European online platforms, (2) the environmental assessment for the Descriptor 2 (D2-NIS) of the EU Marine Strategy Framework Directive (MSFD), as well as (3) supporting decisions made by stakeholders. It is the result of extensive collaboration among scientist, manager’s and citizen science in the Spanish North-Atlantic, South-Atlantic, Gibraltar Strait-Alboran, Levantine-Balearic and Canary Islands marine divisions, providing an updated overview of the spatial distribution of relevant extended and invasive NIS of recent and established NIS introduced by maritime transport and aquaculture pathways, as well as on cryptogenic or native species in expansion due to the climatic water warming trend