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Copyright of Revista Chilena de Derecho is the property of Revista Chilena de Derecho and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Cuadernos de Historia is the property of Universidad de Chile, Facultad de Filosofia y Humanidades and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Trade data shows that real exchange rate fluctuates more than other variables such as consumption and GDP, and also presents significant deviations from the Law of One Price. In light of these facts, this paper develops and estimates a non-monetary DSGE model under financial autarky for the international trade of goods and services between Chile and the U.S. In this context, the higher volatility of the real exchange rate is explained by the existence of transaction costs and varying degrees of imperfect substitution in consumption between home and foreign goods which endogenously induce a home bias effect. The results reveal that the estimated transaction costs and the asymmetric home bias effect content in the data would be responsible for the low correlation between consumption in both countries and the higher real exchange rate fluctuations. Finally, the model is able to replicate much of the stylized facts observed in the data, but fails to address the Backus-Smith puzzle. [ABSTRACT FROM AUTHOR]

In this article, the author discusses about foreign-loan guarantees and intertemporal substitution of investment in Texas and Chile. The investment booms were made possible by government guarantees on foreign loans extended to the economies. Government foreign-loan guarantees potentially are useful instruments for the fiscal management of financial losses suffered by banks and firms. If financial claims against domestic assets increase in riskiness as a result of an external shock, a problem of under-investment in an economy may occur. Although foreign-loan guarantees in the aftermath of an external shock encourage foreigners to lend to financially distressed banks and firms, this paper will explore the possibility that these loan guarantees may also distort an economy's macroeconomic adjustment by permitting a postponement of the liquidation process. Examples of financial collapse in Chile and Texas involved loan guarantees to external lenders of the domestic banking systems. Examples suggest that the stronger is the lender of last resort to a banking system, the greater will be the ability of the system to attract external funds in the aftermath of an external shock.