Oil price shock leads to economic downturn and inflation spike in Chile.
The article analyzes how oil-price shocks affect the Chilean economy using a complex model. By simulating different scenarios, the researchers found that a 13% increase in oil prices leads to a 0.5% decrease in output and a 0.4% increase in inflation. This negative impact is mainly caused by the Central Bank of Chile tightening monetary policy in response to the oil shock.