path to the one that can be inferred from the different measures of private sector expectations over the two weeks prior to the statistical closing of this report. ” and in the presentation to the senate this was clarified in more detail by stating that by the end of the year the monetary policy rate could lie in the range of twenty - five basis points more or less than its current level. in practice, and only two months after that presentation to the senate, we have increased the monetary policy rate by one hundred basis points. in the board ’ s opinion, this is necessary to prevent the latest news on inflation – both internationally and its passthrough to some domestic prices – from delaying the adjustment of inflation to its target within the policy horizon. the anchor for these decisions was the baseline scenario on which the may monetary policy report was drawn up. publication of the monetary policy report is reinforced by the statements released at the end of our monthly monetary policy meetings in which we generally refer explicitly to the baseline scenario. additionally, three weeks after each meeting takes place we publish the minutes containing the board members ’ discussions which again frequently refer to the most likely scenario. with the objective of acting with the greatest independence possible in the monetary policy meetings and minimizing the risks of introducing unnecessary noise on financial markets, we have a self - imposed period of silence, or purdah, in the days prior to the meeting and to the monetary policy report release. evidence shows that financial markets are much more sensitive to information in the few days prior to a monetary policy meeting ( ehrmann and see woodford ( 2007 ) for recent discussion of the alternatives and coherence with a framework of inflation targets implemented through inflation forecast targeting. fratzscher, 2008 ) and, at the same time, any comment that is misunderstood or confused could influence the position of someone in the meeting. are there limits to transparency? the answer is definitely yes. in every democratic society, transparency is a duty. but the limit is to what point an excess of transparency might limit the bank in achieving its objective which is price stability. for example, we could televise live the monetary policy meetings but that would restrict the open, frank dialogue that goes on. besides, the discussions could be misinterpreted because they involve much technical jargon and judgments. i imagine that these same reasons prevent court deliberations from being broadcast live. in other words, since context determines conduct, an excess of transparency can limit the freedom

substantial change would require an improvement in business expectations that have remained in negative territory for some time. 25. the possibility of raising potential growth beyond the figures quoted above relies mainly on : ( 1 ) increasing human capital accumulation through increased labor participation, raising working skills above the already projected levels or the migration of workers with the competences required by the chilean system ; and ( 2 ) making productivity improvements via enhancing companies ’ efficiency, lowering production and trading costs, and changing output composition toward more competitive and productive sectors, while advancing in terms of innovation and technological development. 26. as chile ’ s concern for growth has intensified, many ideas about public policies have emerged that could help enhance productivity, with proposals coming from the government, private agents and the national productivity commission. in particular, policies have been developed that have permitted to diversify the energy matrix, increase supply reliability and reduce costs. there have been other factors, however, that pose a risk to productivity, including initiatives that may overburden corporate costs, generate new trading costs or reduce savings. last, but not least, any discussion about productivity must necessarily cover technological development and innovation, which in chile is limited by low private and public investment in r & d and by discontinuity in long - term policies aiming at economic diversification. 27. a third key challenge for the chilean economy is to strengthen its institutions and making them more trustworthy. even though chile enjoys a substantial advantage in this respect over other emerging countries, trust in public and private institutions has suffered from a series of scandals in recent times and rebuilding such trust would require consistent action over a number of years. such effort, however, would be well justified since a low - trust economy is likely to suffer from high transaction costs, free - riding behavior and low policy effectiveness. 28. the former three elements — investor expectations, potential growth and institutional trust — are certainly not part of the conventional agenda of central banks. however, even a narrow focus on stable and low inflation requires monitoring the key developments affecting the future path of the economy. while the central bank can contribute indirectly to these goals by reducing economic instability and uncertainty, it would greatly benefit from the additional flexibility, effectiveness and welfare that they would be able to build.