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How relevant could capital income tax be as a growth engine? We analyse the Chilean experience that since the mid-80s has shown significant increase in its growth rate, outperforming most Latin American countries in the same period. This paper analyses the contribution of capital stock to the Chilean business cycle from 1960 to 2019. We do so by constructing a dynamic general equilibrium model in which firms accumulate capital and capital income taxation occurs at both firm and individual levels. In line with previous studies, we find that productivity shocks were an important driver of growth but unlike them, we find that capital income taxation policies also played an important role in explaining the Chilean miracle. The large adjustments in capital stock that Chile experienced are in line with the reasoning that interest rates in small open economies like Chile respond less to increases in capital taxation, and therefore do not diminish the impact of tax reforms. [ABSTRACT FROM AUTHOR]

Committed to achieving carbon neutrality by mid-century, South America faces unique challenges in carbon mitigation due to its distinct socio-economic, technological, and institutional backgrounds compared to developed and other developing economies. Previous research on South America's carbon emissions has limited country and sector coverage and typically adopts a top-down approach that focuses on the overall emissions of an economy, neglecting individual energy sources and emission sectors. Therefore, this paper compiles a comprehensive inventory of CO 2 emissions for South American countries based on a meticulous bottom-up approach and multi-source data integration, followed by a thorough analysis of their temporal evolution patterns and the driving forces behind them. Between 2010 and 2020, South America's overall emissions peaked in 2014 at 1092.3 Mt., led by emissions from oil consumption and from the transport and electricity sectors, and dropped to 865.6 Mt. in 2020, due to the economic fluctuations and COVID-19. Specifically, Brazil was the largest emitter, Chile experienced the most significant increase in emissions, and Paraguay recorded the highest emission growth rate. Generally, expanding population was constant driver of emission growth. High energy intensity led to significant emission increases in Brazil and Ecuador, while elevated carbon intensity was the main driver in Argentina. Energy structure changes played a positive role in most countries to different extents (e.g., much more significant in Brazil than in Chile) but aggrevated emissions in Paraguay and Guyana. Therefore, carbon mitigation strategies should be tailored to each country's unique national circumstances. • During 2010–2020, South America's CO 2 emissions from fossil fuels peaked in 2014. • Transport and electricity sectors comprised over 60% of total emissions. • Brazil was the top emitter, while Chile saw the largest increase in emissions. • Emission patterns and driving factors varied significantly across countries. • Carbon reduction strategies should be tailored to local circumstances. [ABSTRACT FROM AUTHOR]