01928cas a2200253 a 4500 AALejournalIMF017231 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475553598 1018-5941 BD-DhAAL BD-DhAAL Comelli, Fabio. To Bet or Not to Bet : Copper Price Uncertainty and Investment in Chile / Fabio Comelli, Esther Perez Ruiz. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (23 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students A strand of research documents Chile's copper dependence hence significant exposure to terms of trade shocks. Copper prices' sharp decline and forecast uncertainty since the end of the commodity super-cycle has rekindled the debate on Chile's adjustment capacity to external shocks. Following Malz (2014), this paper builds a time-varying measure of copper price uncertainty using options contracts. VAR analysis shows that the investment response to an uncertainty shock of average magnitude in the sample is strong and persistent: the cumulative fall in investment from trend at a one-year horizon ranges 2-5.8 percentage points; and it takes between 1 1\2 and 2 years for investment to return to its trend level. Empirical ranges depend on alternative definitions for investment, uncertainty, and options' maturing time. Mode of access: Internet Perez Ruiz, Esther. IMF Working Papers; Working Paper ; No. 2016/218 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/218/001.2016.issue-218-en.xml IMF e-Library