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.

Invariant and polynomial identities for higher rank matrices

We exhibit explicit expressions, in terms of components, of discriminants, determinants, characteristic polynomials and polynomial identities for matrices of higher rank. We define permutation tensors and in term of them we construct discriminants and the determinant as the discriminant of order $d$, where $d$ is the dimension of the matrix. The characteristic polynomials and the Cayley--Hamilton theorem for higher rank matrices are obtained there from

Mass dependence of vector meson photoproduction off protons and nuclei within the energy-dependent hot-spot model

We study the photoproduction of vector mesons off proton and off nuclear targets. We work within the colour dipole model in an approach that includes subnucleon degrees of freedom, so-called hot spots, whose positions in the impact-parameter plane change event-by-event. The key feature of our model is that the number of hot spots depends on the energy of the photon--target interaction. Predictions are presented for exclusive and dissociative production of $\rho^{0}$, $\mathrm{J/}\psi$, and $\Upsilon(1S)$ off protons, as well as for coherent and incoherent photoproduction of $\rho^{0}$ off nuclear targets, where Xe, Au, and Pb nuclei are considered. We find that the mass dependence of dissociative production off protons as a function of the energy of the interaction provides a further handle to search for saturation effects at HERA, the LHC and future colliders. We also find that the coherent photonuclear production of $\rho^{0}$ is sensitive to fluctuations in the subnucleon degrees of freedom at RHIC and LHC energies.Comment: 19 pages, 4 figures. Typo in legend of figs. 1 and 2 correcte

Nonparametric maximum likelihood estimation of probability densities by penalty function methods

When it is known a priori exactly to which finite dimensional manifold the probability density function gives rise to a set of samples, the parametric maximum likelihood estimation procedure leads to poor estimates and is unstable; while the nonparametric maximum likelihood procedure is undefined. A very general theory of maximum penalized likelihood estimation which should avoid many of these difficulties is presented. It is demonstrated that each reproducing kernel Hilbert space leads, in a very natural way, to a maximum penalized likelihood estimator and that a well-known class of reproducing kernel Hilbert spaces gives polynomial splines as the nonparametric maximum penalized likelihood estimates