Documento de TrabajoISSN (edición impresa) 0716-7334

ISSN (edición electrónica) 0717-7593

The Implementation ofMonetary Policy in anEmerging Economy: TheCase of Chile.

Christian A. JohnsonRodrigo Vergara

Nº 291Mayo 2005

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Versión impresa ISSN: 0716-7334Versión electrónica ISSN: 0717-7593

PONTIFICIA UNIVERSIDAD CATOLICA DE CHILEINSTITUTO DE ECONOMIA

Oficina de PublicacionesCasilla 76, Correo 17, Santiagowww.economia.puc.cl

THE IMPLEMENTATION OF MONETARYPOLICY IN AN EMERGING ECONOMY:

THE CASE OF CHILE

Christian A. Johnson*

Rodrigo Vergara**

Documento de Trabajo Nº 291

Santiago, Mayo 2005

* E-mail: chjohnson@uai.cl.** E-mail: rvergara@faceapuc.cl

CONTENTS

ABSTRACT

1. INTRODUCTION 1

2. MONETARY POLICY IN CHILE: 1990-2003 3

3. ARTIFICIAL NEURAL NETWORKS: APPLICATIONS ANDANALYSIS 123.1. Analytical Neural Network 143.2. Back-Propagation Learning Using Gradient Descent Methods 163.3. Extracting the Monetary Policy Reaction Function 17

4. THE RESULTS 18

5. CONCLUSIONS 22

REFERENCES 24