About this work
Chile’s policy stance was shifting sharply after fiscal expansion helped overheat the economy. In February 2022, Jonathan Fortun and coauthors assessed how simultaneous fiscal and monetary tightening could cool demand. They estimated that the extraordinary budgeted spending cuts could subtract five percentage points from growth and two from inflation, and expected overheating to end in the second half of 2022 despite continuing social challenges.
Abstract
Chile’s policy stance was shifting sharply after fiscal expansion helped overheat the economy. In February 2022, Jonathan Fortun and coauthors assessed how simultaneous fiscal and monetary tightening could cool demand. They estimated that the extraordinary budgeted spending cuts could subtract five percentage points from growth and two from inflation, and expected overheating to end in the second half of 2022 despite continuing social challenges.
Cite this work
Jonathan Fortun, Sergi Lanau, Jonah Rosenthal (2022). Economic Views: Tight Policies to End Chile’s Overheating. Institute of International Finance.