Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
The Chilean Fiscal Rule
From 2001 the fiscal policy in Chile has been based on a structural surplus rule. Underthis rule, the government is committing itself to maintain its expenditures equal to thestructural revenue minus the target for the structural surplus, which is expressed interms of the GDP. The calculation of the structural balance depends on trend output, thelong-run copper price and the structural income from Codelco’s molybdenum sale.While the latter is calculated with a reference price determined as the average of pastprices, panels of independent experts, who meet once a year, determine the two former.The fact that independent experts have substantial influence on the fiscal budget makesthe Chilean fiscal rule different from similar rules applied in other countries.