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This study investigates the maturity structure of listed non-financial Brazilian companies from 2010 to 2019 and reveals that these companies do not spread their debt maturities upon renewal, unlike the results observed by Choi et al. (2018) for US firms. Even after the rollover shock in 2015 where the Brazilian sovereign debt's investment were downgraded, these firms did not increase the maturity spread of their debt. In addition, the research evaluated corporate debt management by utilizing Brazil's downgrade as a "quasi-natural experiment" in the exogenous shock model. The results indicate that Brazilian companies may face considerable debt rollover risks due to the concentration of maturities in specific maturity ranges during future credit shocks. Proper control of financing structures is crucial to ensure that companies remain resilient and do not have to turn down profitable investments or high-quality assets during financial crises. This research has significant implications for corporate practice and the associated risks of financing profitable projects, particularly in countries with less efficient capital markets. [ABSTRACT FROM AUTHOR]

This paper investigates whether political pressure affects the conduct of monetary policy in Brazil. For the period between January 2010 and August 2020, we estimate a modified Taylor rule to empirically test whether the calls for lower interest rates by presidents induce Central Bank of Brazil (BCB) to lower the policy rate. We document that BCB is more likely to set the policy rate in line with the preferences of political leaders. We also show that the response of BCB to political pressure remained significant even though political pressure diminished in recent years. [ABSTRACT FROM AUTHOR]

This paper uses a model to decompose nominal yields in expected shortterm future rates and the term premium. It then uses regressions to explain the determinants of the term premium in Brazil. Among external variables, U.S. term premium and monetary policy help to explain Brazilian 10-year term premium, while among domestic variables, survey expectations for inflation, GDP growth, the Selic policy rate and net debt, along with their disagreement, contribute to explain movements in the Brazilian 10-year term premium. [ABSTRACT FROM AUTHOR]

From 1996 to 2016, Brazil faced great fluctuations in both its exchange and interest rates and simultaneously a huge growth of its agriculture has taken place. Examining the literature that deals with the relationships among these three variables (interest rate, exchange rate and agriculture GDP) we verified that monetary and exchange shocks can affect directly and/or indirectly (through relative prices) the agriculture GDP. However, these effects can be coincident or contrary between them. What actually happened in Brazil from 1996 to 2016? This article aimed to access the direct and indirect effects of monetary and exchange rate shocks on Brazil´s agriculture GDP taking into consideration years ranging from 1996 thru 2016. Using quarterly data for the 1996-2016 period, autoregressive vector models (VAR and VEC) were estimated. The exchange rate and monetary shocks were analyzed considering three different interest rate types, namely: the current Brazil´s Federal Funds Rate (Nominal SELIC rate), real interest rate of agricultural loans, and ex-ante real interest rate. We also analyzed the effect of the exchange rate separately on prices paid and on prices received by the agriculture (both make up the relative prices of agriculture) using an ARDL (Distributed Lag Self-Regressive Model) model with monthly data. Our econometric results revealed that both direct and indirect effects of monetary shocks were negative on the agriculture growth while the direct and indirect effects of exchange rate shocks were mutually contradictory themselves on the Brazil´s agriculture GDP. Because of the technical changes that have taken place during the 2000s and the 2010s, which turned some of the most representative crops more dependent on imported inputs, and the hedging behavior that the firms have adopted during the first two decades of the 21st century, which protects them from exchange oscillations, the agricultural sector lost sensitivity to the exchange rate variations in some extent. Regarding policy implications, it could be said that monetary policy can be efficient in the promotion of the agricultural sector, and, in fact, Brazilian government has been doing such through the rural credit subsidized interest rate. Exchange policy, on the other hand, proved to be inefficient in favoring the agriculture, or, in other words, the government can freely exercise exchange policy without regards to harm the agricultural sector. [ABSTRACT FROM AUTHOR]

Se analiza, mediante un modelo econométrico, el traspaso del tipo de cambio a la inflación, considerando la variable instrumento de la política monetaria, la variable objetivo, el nivel de actividad económica, el nivel de crédito y el tipo de cambio. Este sistema se ve afectado exógenamente por los precios de los productos básicos, el nivel de actividad del sector externo y la incertidumbre percibida por los inversionistas internacionales. Utilizando modelos vectoriales de corrección de errores, observamos un mayor traspaso a los precios administrados que a los precios libres y una marcada asimetría en el traspaso cambiario caracterizada por un traspaso más intenso cuando la moneda nacional se aprecia (efecto deflacionario) que cuando se deprecia (efecto inflacionario). Además, destacamos que la asimetría en el traspaso a los precios internos se debe a la asimetría en los precios libres, pues en los precios administrados la asimetría es poco significativa. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the existing relations between the management of public bonds on the dynamics of debt, term structure of interest rates and economic cycle, through a dynamic stochastic general equilibrium model (DSGE), which was estimated through Bayesian inference techniques using data from Brazil. Design/methodology/approach: The model developed was used to investigate the effects of the public debt average maturity management when the economy faces a monetary policy shock. For this, three management scenarios are evaluated, including Brazilian securities average term. Findings: Contrary to what might be inferred from DSGE models that limited the analysis of the debt term by imposing only one-period bonds, a contractionary monetary policy shock does not necessarily cause public debt to increase significantly. Debt term structure plays a crucial role in this result since the government does not need to roll the debt over at higher costs when the debt term profile is longer, reducing the debt service costs and then the impact on the overall debt. Originality/value: Despite the relevance of this theme and its implications for the dynamics of the economy, there is still a gap to be filled in the literature when using DSGE models, since most part of the work that used this methodology limited the analysis of the debt term by imposing that government issues only one-period bonds. This paper differs from the others insofar as it promotes an investigation focused on the role played by debt maturity management on the performance of the contractionary monetary policy. This approach can generate a better understanding of debt management policy and its interaction with fiscal and monetary policies. [ABSTRACT FROM AUTHOR]

A partir de la hipótesis de que las reglas de política monetaria y fiscal en el Brasil pueden haber estado sujetas a diferentes regímenes, en este estudio se utiliza el modelo de Leeper (1991 y 2005) para establecer la cronología de las reglas de política en cuanto a su carácter activo o pasivo. Las reglas de política se estiman mediante el modelo de cambio de Markov, con una base de datos mensuales de noviembre de 2002 a diciembre de 2015, en que los regímenes se generan de manera endógena. Los resultados obtenidos permiten afirmar que hubo dominancia fiscal en 2010 y entre 2013 y 2014. La dominancia monetaria se produjo en gran parte de 2003 y en el período de 2005 a 2007. El modelo también trata de explicar por qué la tasa de inflación se mantuvo al alza en 2015, a pesar de que el Banco Central del Brasil puso en práctica una política monetaria activa. [ABSTRACT FROM AUTHOR]

This paper explores the effects of currency depreciations on output for the main Latin American countries that have been using Inflation Targeting for almost two decades. We construct VAR models for Brazil, Chile, Colombia, Mexico and Peru for the last two decades and we find that depreciations have short-run contractionary effects in Brazil and Mexico. We illustrate some of the policy implications of that finding by building a simple model, and we show that contractionary effects of depreciations may have destabilizing effects when monetary policy is conducted using a standard Taylor Rule. [ABSTRACT FROM AUTHOR]

This paper empirically models the dynamics of Brazilian government bond (BGB) yields based on monthly macroeconomic data, in the context of the evolution of the key macroeconomic variables in Brazil. The results show that the current short-term interest rate has a decisive influence on the long-term interest rate on BGBs, after controlling for various key macroeconomic variables, such as inflation and industrial production. These findings support John Maynard Keynes's claim that the central bank's actions influence the long-term interest rate on government bonds mainly through the current short-term interest rate. These findings have important policy implications for Brazil. This paper relates the findings of the estimated models to ongoing debates in fiscal and monetary policies. [ABSTRACT FROM AUTHOR]

Purpose: This paper analyzes the potential presence of time-varying asymmetries in the preference parameters of the Central Bank of Brazil during the inflation targeting regime. Design/methodology/approach: Given the econometric issues inherent to classical time-varying parameter (TVP) regressions, a Bayesian estimation procedure is implemented in order to provide more robust parameter estimates. A stochastic volatility specification is also included to take into account the potential presence of conditional heteroskedasticity. Findings: The obtained results show that the reduced form and structural parameters were not constant during the period considered. Moreover, the subsequent analysis of the preference parameters provided evidences of short periods in which asymmetry was an important feature to the conduction of monetary policy in Brazil. Yet, during most of the sample period, the loss function was considered to be symmetrical. Originality/value: This paper aims to contribute to the rather scarce monetary debate on time-varying central bank preferences. The study of Lopes and Aragón (2014) is, to the best of the authors' knowledge, the only study for Brazil considering specifically TVPs. The authors applied Kalman filter estimation to data from 2000:M1 to 2011:M12. Despite the similar structure of TVPs, the present paper extends the latter study by controlling for stochastic volatility. Ignoring conditional heteroskedasticity might lead to spurious movements in time-varying variables and inaccurate inference (Hamilton, 2010). Thus, the stochastic volatility specification is included to take this issue into account. The authors follow the theoretical scheme put forward by Surico (2007) and Aragón and Portugal (2010), in which the economy is modeled from a New Keynesian perspective and the central bank loss function is assumed to be asymmetric regarding the responses to inflation and output deviations from their targets. On the empirical side, the authors propose a TVP univariate regression with stochastic volatility for the Brazilian reduced-form reaction function, following closely the Bayesian econometric procedure developed by Nakajima (2011). Given the nonlinear non-Gaussian nature of the TVP regression with stochastic volatility, the choice of a nonlinear Bayesian approach using the Markov chain Monte Carlo (MCMC) method is justified due to the intractability of the associated likelihood function (Primiceri, 2005). Finally, based on the theoretical model specification, the authors intend to recover the central bank preference parameters as to further evaluate the degree of asymmetry and its potential time-variation under the inflation targeting regime. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to analyze the macroeconomic effects of a monetary policy shock considering that fiscal policy is under fiscal constraints. For that, a dynamic stochastic general equilibrium (DSGE) model was developed for Brazil, which was estimated through Bayesian econometrics. Design/methodology/approach: In the basic model, the government does not have any type of fiscal restriction. The other two estimated models, however, consider that the fiscal authority implements some kind of fiscal rule. One of these rules is the Constitutional Amendment 95/2016 (EA 95/2016), which includes a limitation for government spending. The other Alternative Rule seeks to represent the characteristics of a more austere fiscal rule, as proposed by Wesselbaum (2017). Findings: It was possible to verify in this paper that the implementation of EA 95/2016 by the Brazilian government does not produce statistically different results and that it reduces the welfare of the households in relation to the scenario without fiscal rule. Thus, the proportionate benefit of EA 95/2016 is less than the cost associated with this fiscal rule (less welfare). If the government adopts a fiscal constraint similar to the Alternative Rule, it is possible to considerably reduce the interaction between fiscal and monetary policy, thereby reducing the fiscal dominance policy over monetary policy. However, the cost in terms of welfare is much higher than the baseline scenario. Thus, the fiscal authority is subject to a trade-off among public debt stabilization and household welfare. Originality/value: The study intends to contribute to the literature on three specific points. First, the monetary–fiscal policy interaction within a representative model of the Brazilian economy is discussed. In addition, the study considers that the government can adopt EA 95/2016 and the Alternative Rule, used in the US economy. Second, the impacts of EA 95/2016 and the Alternative Rule on household welfare will be quantified. Finally, two types of individuals (Ricardian and non-Ricardian agents) and two sectors of production (wholesalers and retailers) are considered. In this paper, the DSGE model is estimated, since the previously mentioned authors performed simulations [ABSTRACT FROM AUTHOR]

Based on the argument that monetary policy credibility can reduce the fear of floating (FF), we analyze this hypothesis for Brazil. Since expectations play a key role under Inflation Targeting, we also analyze whether credibility can affect the expectations of financial markets about the FF of the Central Bank. The results show credibility can reduce the FF, and financial markets expect less intervention by the Central Bank when credibility is higher. Thus, policymakers must pay attention to the credibility of their policies, otherwise they may be misinterpreted regarding both the goals they pursue and how they conduct monetary policy. [ABSTRACT FROM AUTHOR]

This article examines the ebbs and flows of German, Italian, French, and Japanese cinemas in Brazil in order to shift attention away from European producers and toward the local distribution gatekeepers who shaped the itineraries of these cinemas and to demonstrate how trade and monetary policy, changing film distribution practices, and regional exhibition monopolies shaped the historical trajectories of cinema. By reconstructing the pre- and postwar circulation of European and Japanese cinemas in Brazil, this essay proposes an odographic approach to film history. Expanding on the transnational turn in film and media studies, this is a film history attuned to the flows and friction of commodity circulation, industrial exchange, and infrastructures of film and media circulation. [ABSTRACT FROM AUTHOR]

This paper investigates the drivers of long term real interest rates in Brazil. It is shown that long term yield on inflation linked bonds are driven by yields on 10 year interest rates of United States (US) government bonds and 10 year risk premium, as measured by the Credit Default Swap (CDS). Long term interest rates in Brazil were on a downward trend, following US real rates and stable risk premium, until the taper tantrum in the first half of 2013. From then onwards, real interest rates rose due to the increase in US real rates in anticipation of the beginning of monetary policy normalization and, more recently, due to a sharp increase in Brazilian risk premium. Policy interest rates do not significantly affect long term real interest rates. [ABSTRACT FROM AUTHOR]

The costs of medicines pose a growing burden on healthcare systems worldwide. A comprehensive understanding of current procurement processes provides strong support for the development of effective policies. This study examined Brazilian Federal Government pharmaceutical procurement data provided by the Integrated System for the Administration of General Services (SIASG) database, from 2006 to 2013. Medicine purchases were aggregated by volume and expenditure for each year. Data on expenditure were adjusted for inflation using the Extended National Consumer Price Index (IPCA) for December 31, 2013. Lorenz distribution curves were used to study the cumulative proportion of purchased therapeutic classes. Expenditure variance analysis was performed to determine the impact of each factor, price and/or volume, on total expenditure variation. Annual expenditure on medicines increased 2.72 times, while the purchased volume of drugs increased 1.99 times. A limited number of therapeutic classes dominated expenditure each year. Drugs for infectious diseases drove the increase in expenditures from 2006 to 2009 but were replaced by antineoplastic and immunomodulating agents beginning in 2010. Immunosuppressants (L04), accounted for one third of purchases since 2010, showing the most substantial growth in expenditures during the period (250-fold increase). The overwhelming price-related increase in expenditures caused by these medicines is bound to have a relevant impact on the sustainability of the pharmaceutical supply system. We observed increasing trends in expenditures, especially in specific therapeutic classes. We propose the development and implementation of better medicine procurement systems, and strategies to allow for monitoring of product price, effectiveness, and safety. This must be done with ongoing assessment of pharmaceutical innovations, therapeutic value and budget impact. [ABSTRACT FROM AUTHOR]

This study used real data from a Brazilian financial institution on transactions involving Consumer Direct Credit (CDC), granted to clients residing in the Distrito Federal (DF), to construct credit scoring models via Logistic Regression and Geographically Weighted Logistic Regression (GWLR) techniques. The aims were: to verify whether the factors that influence credit risk differ according to the borrower's geographic location; to compare the set of models estimated via GWLR with the global model estimated via Logistic Regression, in terms of predictive power and financial losses for the institution; and to verify the viability of using the GWLR technique to develop credit scoring models. The metrics used to compare the models developed via the two techniques were the AICc informational criterion, the accuracy of the models, the percentage of false positives, the sum of the value of false positive debt, and the expected monetary value of portfolio default compared with the monetary value of defaults observed. The models estimated for each region in the DF were distinct in their variables and coefficients (parameters), with it being concluded that credit risk was influenced differently in each region in the study. The Logistic Regression and GWLR methodologies presented very close results, in terms of predictive power and financial losses for the institution, and the study demonstrated viability in using the GWLR technique to develop credit scoring models for the target population in the study. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to analyze the conduct of monetary policy in Brazil and estimate the country’s neutral real interest rate.Design/methodology/approach The authors make use of a state-space macroeconomic model representation.Findings The period of analysis goes from 2003 up to the end of 2013 and the results show that the country’s natural rate of interest was around 4.2 percent in December 2013.Originality/value One of the main differences of this work is the inclusion of variables such as the real exchange rate and world interest rate. This is important because these variables play an important role in the definition of the interest rate and, consequently, in the definition of the neutral interest rate. [ABSTRACT FROM AUTHOR]

Corporate governance in central banks has evolved in recent years, both as a result of advances made in the study of the subject by supranational organizations, as well as through the adoption of the best practices used in the public and private sectors. This paper aims to identify, analyze and compare key aspects of corporate governance used by the central banks of Brazil, Canada and England in 2015. By reviewing existing literature on the subject, it was possible to analyze certain aspects of the monetary authorities of these three countries in terms of their structures and their committeees, as well as the three pillars of governance normally attributed to central banks: independence, accountability and transparency. The results showed significant differences between the three, and suggested that the degree of maturity of each country's society has a certain influence on the practices of governance adopted by its central bank. [ABSTRACT FROM AUTHOR]

The paper estimates the fiscal cost of an increase in the Brazilian policy interest rate - the SELIC - by considering not only the direct effect on the yield of public bonds that are indexed to the SELIC, but also indirect effects on: (i) the yield of public bonds that are indexed to the exchange rate and inflation, and (ii) the stock of public net debt through adjustments in the value of international reserves measured in domestic currency. Projections are based on the estimation of the relationship between interest rates, exchange rates and inflation by means of a vector auto-regression. We conclude that the inclusion of such indirect effects has an ambiguous effect on the response of the implicit interest rate on public net debt to shocks in the SELIC, when adjustments in the value of international reserves are not considered. However, the inclusion of the latter amplifies the fiscal cost of a more restrictive monetary policy. These results call for a better coordination between monetary, fiscal and exchange rate policies in Brazil. [ABSTRACT FROM AUTHOR]

The impact of news releases related to the inflation targeting regime on the financial market is analyzed by estimating a bivariate VAR GARCH-BEKK-in-mean model. We use daily data, from January 2006 to May 2017, of stock prices index (IBOVESPA), exchange rate (BRL/USD) and interbank deposit rate (DI360). We developed a positive and negative news index to measure the impact of news releases based on Caporale et al. (2016) and Caporale et al. (2018). Although the literature on the subject is vast, this paper fills relevant gaps in three ways. First, we investigate the bidirectional relationship between monetary policy related news releases and the behavior of asset prices before and after the 2008 crisis in Brazil. Second, we consider the relationship between the second moments of the variables of interest, using the conditional volatility as a proxy for uncertainty. Third, we provide a time series approach to measure the effect of macroeconomic related news releases on financial asset returns. The results indicate there are mean spread effects from news for the exchange rate and the Brazilian stock index: (i) the GARCH-in-mean parameter is statistically significant for positive and the difference of news for the DI360; (ii) monetary policy and external shocks are statiscally significant as expected with exception of the external shocks for the Brazilian stock index; and (iii) there are volatility spillovers and changes of this volatility after the crisis for stock index and DI360. [ABSTRACT FROM AUTHOR]

The objective of this paper is to examine the relationship between fiscal and monetary policy coordination and fiscal multipliers in Argentina, Brazil, Chile, and Mexico. To do so, we first look at the theoretical framework of the New Consensus Macroeconomics (NCM), and then analyze the trends in the four countries for variables including consumption, investment, government spending, and interest rates. Finally, we present an estimate of the spending and monetary multipliers with proxy variables. The contribution of this paper consists of one, showing the inexistence of the crowding out effect, and two, quantifying the multipliers for the aforementioned countries. [ABSTRACT FROM AUTHOR]

In the nineteenth century, money appear primarily as gold. In the twenty-first century, it appears as strictly fiduciary money. It is known that Marx said very clearly that the golden money was the effective basis of the monetary and credit system. Had the historical development finally shown that his theory of value and money would be false? Marxists have struggled continually with this problem. This paper tries to show that exist a simple and good answer to this crucial question. It comes just developing a little the dialectics of commodities and money found on Marx's Capital. [ABSTRACT FROM AUTHOR]

Purpose – Due to the fact that studies on central bank communication in emerging countries are still scarce and there are few studies related to the influence that central bank’s perspectives about the state of the economy have on inflation expectations in emerging economies, the purpose of this paper is to contribute to the literature in the following aspects: it proposes an indicator of the central bank’s perception of inflation based on the minutes of the COPOM meetings, and, it analyzes the influence of central bank communication on expert inflation expectations through such indicator. Design/methodology/approach – Due to the fact that the perception of the Central Bank of Brazil is not directly observable, it is measured through the fuzzy set theory by an indicator that captures the informational content of the minutes of the COPOM meetings. The empirical analysis uses ordinary least squares, the generalized method of moments and vector-autoregressive through impulse-response analysis. Findings – The findings suggest that the expectations of financial market experts react according to the content of the information provided by the central bank, i.e., announcements cause deterioration of expectations in times of instability, and reduce inflation expectations when inflation is controlled. The results also support the idea that the credibility of inflation targeting plays a key role in determining inflation expectations. Practical implications – This paper suggests a new approach on studies about central bank communication. The focus here is not on the effect of the announcements in terms of future monetary policy, but on the perception of the central bank in terms of inflation. This central bank’s perception reflects the optimistic or pessimistic view about the economic outlook and risk of inflation and this perception is considered by experts of financial markets. Originality/value – For Brazil, there are no studies about the influence of communication through the minutes of the Brazilian Monetary Policy Committee meetings on inflation expectations. The authors develop an indicator in order to measure central bank’s perception of inflation based on the minutes of COPOM meetings. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to consider a monetary-jump model to measure the contribution of jumps to the total volatility of interest rates in the Brazilian interbank market and to assess the extent to which the central bank’s unanticipated monetary policy decisions are driving these jumps. Design/methodology/approach – The authors use a sample of swap rates contracts with different maturities to estimate a mixture GARCH-jump model that disentangles two components of interest rate volatility: a GARCH-type specification that models conditional heteroskedasticity to account for the volatility during “normal” times and a Poisson process that models the occurrence of abrupt changes in interest rates. Findings – The contribution of jumps to the total volatility is substantial, and monetary policy decisions partly explain the occurrence of those jumps. In particular, the authors find that the likelihood of a jump occurring during a meeting day of the Brazilian central bank’s monetary policy committee (COPOM) is higher in comparison to that of a non-meeting day. Research limitations/implications – The occurrence of jumps in the term structure of interest rates raises the question of the transmission mechanism of the monetary policy through the asset price channel as well as the relation between jumps and economic fundamentals. Practical implications – Communication between the central bank and the market will affect expectations and asset values. If the central bank’s decisions generate fewer jumps, then the variance of the interest rate-linked asset values will also be reduced. Originality/value – The paper employs a new approach to assess monetary policy surprises to a set of Brazilian interest rate data and relates the occurrence of jumps to the macroeconomic environment. [ABSTRACT FROM AUTHOR]

In the wake of the global financial crisis most emerging market and developing countries experienced a surge in capital inflows that accentuated financial fragility in those countries. Unlike similar surges in the 1990s and in the five years leading to the global financial crisis in 2008, this time many emerging market and developing countries re-regulated cross-border financial flows. According to the literature such acts are seen as quite difficult, given the pervasiveness of the ‘capital mobility hypothesis’ which renders that the structural power of global financial markets is too much of a match for states, especially those in emerging markets. The paper traces how Brazil and South Korea were able to countervail the structural power of global capital markets and put in place regulations on cross-border finance in the wake of the crisis. The paper also outlines the contours an inductive theory regarding the conditions under which emerging market and developing nations may deviate from the ‘capital mobility hypotheses’ and similar literatures. This concept is referred to as ‘countervailing monetary power’. [ABSTRACT FROM PUBLISHER]

Purpose -- The purpose of this paper is to analyze the influence of prudential regulation and monetary policies on the supply of credit as well as the influence of such policies on the aggregate investment through the credit channel in Brazil. Design/methodology/approach -- The empirical analysis is based on estimates through ordinary least squares (OLS), generalized method of moments (GMM), system of equations through GMM (system-GMM), and impulse response functions through vector autoregressive (VAR). Findings -- The results suggest that monetary policies and prudential regulation affect aggregate investment through the bank lending channel. With regards to elasticities, the findings indicate that the credit is very sensitive to variations in economic activity and, in turn, prudential regulation presents a stronger influence on credit than the basic interest rate and the reserve requirement rate. Moreover, the estimates suggest that aggregate investment is more sensitive to entrepreneurs' expectations and credit supply. Practical implications -- Aiming to reduce systemic risk in the economy, capital requirements may be increased in order to induce banks to a lower risk exposure by reducing the supply of loans. However, while this instrument strengthens the banking system, it can also lead the banking system to become less sensitive to monetary policy shocks, and also discourage aggregate demand through the influence that the credit exerts on investments. As a consequence, prudential regulation is an important tool because it acts on the balance between economic growth and low risk exposure of banks. Originality/value -- The paper provides useful insights to academicians, economists and policymakers who are interested in understanding the effects of monetary policies and prudential regulation on aggregate investment through the credit channel in an emerging economy under inflation targeting. Moreover, the paper develops a theoretical model in order to show the influence of different monetary policies, as well as the influence of prudential regulation on the supply of credit. [ABSTRACT FROM AUTHOR]

This text provides a critical analysis of the experiences of Brazil, Chile and Mexico, countries that have adopted the inflationary targeting monetary policy espoused by New Consensus Macroeconomics ( NCM). Using cointegration and error correction models, as well as a discussion of the major facts of the case, we contrast the NCM with the empirical evidence available. One essential feature of its modus operandi in these economies lies in the fact that inflation control is crucially dependent on the appreciation of the exchange rate. The essential hypothesis of the NCM cannot be accepted. Similarly, its monetary policy, in which inflation depends on the product gap, contradicts the export-led growth model adopted by these countries and is a recessive method of stabilizing prices. [ABSTRACT FROM AUTHOR]

The main objective of this paper is to estimate the preferences of the Central Bank of Brazil after the inflation targeting regime (January 2000 to December 2013), using a DSGE model with microeconomic foundations for a small open economy, based especially on the work of Kam et al. (2009) . The model used in this study considers that the Central Bank minimizes a loss function, taking into account the deviation of inflation from its target, output stabilization, the interest rate smoothing and, unlike the previous works, the exchange rate. The results show that the major concern of the monetary authority in the period was the stabilization of inflation, followed by interest rate smoothing, exchange stabilization and, finally, output stabilization. The large value for the exchange rate smoothing parameter suggests the presence of fear of floating in the Brazilian case. An improved inflation targeting strategy should allow for less Central Bank intervention in the exchange rate market. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to demonstrate that both the reputation of the monetary authority and the credibility of the regime of inflation targeting are important to reduce the inflation bias and the effort of the monetary authority in an emerging economy. Design/methodology/approach – The paper develops a model which shows that the gain of credibility reduces the effort of the monetary authority in the conduct of monetary policy. The paper presents an econometric analysis for Brazil through ordinary least squares, generalized method of moments (GMM), system of equations by GMM and vector autoregressive. Findings – The findings suggest that the reputation of the monetary authority is important to the improvement of credibility, and the gains of credibility reduce the effort of the monetary authority in the conduct of monetary policy, reducing the variations of the monetary base. Originality/value – In the theoretical field, the study develops a model which shows that credibility is important to reduce both the inflation bias and the efforts of the monetary authority in the conduct of monetary policy. In the empirical field: first, it proposes a new index of reputation for the monetary authority; second, it demonstrates that the gain of reputation improves credibility, but also that attempts to exploit the output-inflation trade-off reduces credibility; third, the analysis found that the gains of credibility reduce the efforts of the monetary authority in the conduct of monetary policy. [ABSTRACT FROM AUTHOR]

In this paper, I discuss ways in which several important fiscal and monetary policies implemented in Brazil after the Real Plan interfered with class relations and how they reveal the financial class character of the state. The fiscal policies analyzed are the release of federal tax revenue entitlements, the so-called fiscal responsibility, and the goals for the primary and nominal fiscal results. In the realm of monetary policy, the analysis focuses on the priority given to inflation control and inflation targeting. The results suggest that these policies facilitated favoritism towards the financial fraction of capital; the policies constitute an institutional apparatus for the reproduction of the income that finance extorts from labor through the state. [ABSTRACT FROM PUBLISHER]

This article examines the question of why interest rates are so high in Brazil as compared to the international average. It looks at theoretical arguments based on excessive government deficits, structural lack of private savings, inflation bias, excessive investment demand and fear of floating. An informal look at the evidence does not strongly corroborate any of these arguments. Hence a wise central bank should consider "testing" the market to make sure it is not dealing with an extreme equilibrium configuration or a long standing disequilibrium. [ABSTRACT FROM AUTHOR]

This paper investigates how interest rates affect the probability of default (PD) in a general equilibrium incomplete markets economy. We show that the PD depends positively on the loan interest rate and negatively on the economy base interest rate. Empirically, this finding is confirmed by estimation of the Cox proportional hazard model with time-varying covariates using a sample of 445 889 individual contracts from a large Brazilian bank. Among the controls are macroeconomic variables and specific characteristics of the contracts and borrowers. A lower base interest rate, implied by easing monetary policy, leads banks to lend more money for riskier borrowers, increasing the PD. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to present a theoretical model and empirically verifies the transmission of monetary policy through the credit channel in Brazil. The study verifies if the monetary policy, the economic activity and the maturity of the inflation targeting regime affect the supply of credit. Design/methodology/approach – The paper offers a review of the literature concerning inflation targeting credibility and the transmission mechanism of monetary policy through the credit channel, it develops a theoretical model based on Bernanke and Blinder and Ferreira and it seeks empirical evidence for the Brazilian economy using ordinary least squares, generalized method of moments and vector autoregressive. Findings – The estimates indicate that the supply of credit is stimulated when the economy heats up, when the monetary authority reduces the interest rate and when the credibility increases. The evidence also indicate that the supply of credit is affected by the variables of the model, economic activity and employment are affected by monetary policy and the supply of credit exerts influence on both employment and output gap. Research limitations/implications – An important implication of this study is that, in inflation targeting emerging economies, such as that of Brazil, following a committed monetary policy to price stability which increases the credibility of the regime of inflation targeting and promoting macroeconomic stability represents a good strategy for improving the volume of lending to the private sector, thus stimulating economic activity and employment. What the findings do indicate is that developing credibility is crucial for emerging economies that are trying to grow, but with inflation being kept under control. Originality/value – The paper presents the following theoretical and empirical contributions: the model incorporates the effect that the credibility of the inflation targeting regime has on the supply of credit and, the econometric approach provides evidence that the monetary policy, the economic activity and the process of anchoring of inflation expectations affect the supply of credit in Brazil. Moreover, the paper finds evidence that the credit channel acts as a transmission mechanism of monetary policy to the economy. [ABSTRACT FROM AUTHOR]

Para analisar empiricamente o impacto das mudanças inesperadas da SELIC no mercado acionário brasileiro entre janeiro de 2003 e maio de 2012, construímos uma medida de surpresa da SELIC, baseada em consenso de mercado. Nossa amostra de eventos é composta de 88 reuniões do COPOM. Em 32 desses eventos ou reuniões, foram observadas mudanças não esperadas. Nossos resultados mostram que para cada 1% de aumento não esperado na SELIC, o índice de mercado, IBOVESPA decresce 3,28%. [ABSTRACT FROM AUTHOR]

Income-transfer policies in Brazil and Argentina. This article deals with the con-ditioned income-transfer developed by the governments of Lula and Dilma, in the Brazilian case, and by Cristina Fernández de Kirchner, in Argentina. In other words, the programs Bolsa Família and "Asignación Universal por Hijo para Protección Social". They are comparatively analyzed with regard to their institutionality, the access criteria, the conditionings and the concept of poverty, in order to discuss whether they constitute or not a social right and the relative importance of the amount given. [ABSTRACT FROM AUTHOR]

The article discusses the developments in the international financial products and a service offered during 2012 and also focuses on jurisdictions related to financial services in South America and Europe. It informs about the changes in Brazil that has been approved by the Brazilian Monetary Council to simplify the foreign exchange in the Brazilian market. It mentions the Brazilian Securities Exchange Commission and the Brazilian Real Estate Investment Funds.

Purpose – The purpose of this paper is to make an analysis of the Brazilian experience after the adoption of inflation targeting concerning the effects caused by the new practices of transparency and communication in the monetary policy. Design/methodology/approach – Changes in the financial market's expectations due to monetary policy actions are analyzed based on methodologies proposed by Cook and Hahn and Kuttner. Daily data from transactions in the interbank deposit futures market of the Securities, Commodities and Futures Exchange (BMF&BOVESPA) are used for the period July 1999-January 2009. Two sub-periods are also considered: the "maturation period" – the first phase of the effects caused by an increase in central bank transparency; and the "wisdom period" – the second phase in the financial market's perception regarding an environment with more transparency. Findings – The findings are in consonance with the idea that an increase in central bank transparency and communication improves the efficiency of expectations hypothesis of the term structure of interest rate and the anticipation of changes in the interest rate target. Originality/value – This study offers some new insights into how central bank communication improves the efficiency of the monetary policy for developing countries, which have adopted inflation targeting. [ABSTRACT FROM AUTHOR]

the purpose of this study is to analyze the cause of mortality of small companies in Brazil, based on situations economics before and after real plan on 1994, on period between 1995 at 2005, using econometrics resources that aid to identify multiplier and competition characteristics of market, the interrelations between companies births and deaths, and the contrary, to show the diagnoses before and after real implantation. In truth, this study consists on the measure and compare the direction of theses influences, by the corresponding sign of the marginal coefficient, the compatibles graphics demonstrations, considering the real implantation, with the aim, also, of let available to policy makers, of the micro and macro segments, forms of analyze alike situations. [ABSTRACT FROM AUTHOR]

This paper aims to identify and describe the new-classics, which area considered to be the creators of the inflation targeting model and to criticize its adoption in Brazil through a post keynesian augmentation. The analysis will be specific for the Brazilian Model starting at its implementation on 1999, with more focus on President Fernando Henrique Cardoso's government. The matters of independency versus autonomy of the Country's central Bank, a theoretical discussion regarding the execution of the monetary policy and its relationship with the success of the proposed plan and an overview of the post keynesian scholars and its ideas regarding monetary policies will be discussed as it follows [ABSTRACT FROM AUTHOR]

Fifteen years of monetary rigidity in Brazil after the Real Plan: a research agenda. The paper makes a review of literature and a research agenda on the anomaly of Brazilian monetary policy. Following a retrospect of the first 15 years after the Real Plan, there is a review of studies aiming to explain the high real interest rate. None of the summarized theses can completely explain the phenomenon. The main research opportunities are: deepening of empirical evidence of monetary policy efficacy loss; improvement in mensuration of its inefficacy; and improvement of alternative instruments to control inflation. The field of political economy is also fertile. One should assess the relevance of oligopolies as an explaining factor of persistence of high inflation. [ABSTRACT FROM AUTHOR]

This paper's goal was to investigate the effect different forms of price presentation have on Brazilian customers' evaluations regarding the following variables: purchase intentions, word-of-mouth communications, trust in advertising, perceived value, and perception of expensive prices. We use the literature suggested by Smith and Nagle (2005a, b) and Krishna, Briesch, Lehmann, and Yuan (2002), in which they suggested that perceived value of price explains customer judgments. Findings from Study 1 indicated that when price is presented in the form of R$ 2,299.00 at the competitors, R$ 1,599.00 here (versus the control group with the traditional price), the retailer had better results in terms of customer purchase intentions. This finding was achieved for products with both high involvement and high monetary value: i.e., values over $ 1,500.00. Outcomes from Study 2, which was based on a low involvement product, a hair dryer, on a specific date in the retail calendar, Mother's Day, showed that the price presented as only this weekend significantly increased customer purchase intentions. Study 3 supported that a 5% discount (vs. regular price vs. 10% vs. 15%) resulted in greater positive impact on buying intention. The paper contributes to price theory by supporting the assumption that price presentation positively influences buying intention, confirming the arguments of Nagle, Hogan and Zale (2011), Urbany, Bearden and Weilbaker (1988) and rejecting the studies by Blech (1981), Golden (1979), and Goodwin and Etgar (1980). [ABSTRACT FROM AUTHOR]

Inflation targeting, Taylor rule and money neutrality: a post-Keynesian critic. This paper critically discusses the inflation targeting regime proposed by orthodox economists, in particular the Taylor Rule. The article describes how the Taylor Rule assumes the argument of money neutrality inherited from the Quantitative Theory of Money. It discusses critically the ways of operation of the rule, and the negative impacts of the interest rate over the potential output. In this sense, the article shows the possible vicious circles of the monetary policy when money is not neutral, as is the case for post-keynesian economists. The relation of interest rates, potential output and the output gap is illustrated in some estimates using the methodology of Vector Auto-Regressive in the Brazilian case. [ABSTRACT FROM AUTHOR]

En este trabajo se evalúa la eficacia de las medidas anticíclicas adoptadas por el gobierno brasileño para mitigar los efectos de la crisis de las hipotecas de alto riesgo. En este contexto, se analizan las repercusiones de las políticas monetaria, fiscal y crediticia en algunos de los principales agregados macroeconómicos. El análisis empírico reveló que la política crediticia expansionista fue un factor decisivo para aumentar el consumo de las familias y el producto agregado durante el período de la crisis. Mientras que la política monetaria expansionista también fue importante para incrementar el producto agregado durante dicho período, los gastos relativos a las inversiones no resultaron sensibles a las políticas anticíclicas. [ABSTRACT FROM AUTHOR]

The article presents an analysis on the policy response of the Monetary Authorities (MA) to the contagion effect of the international financial crisis in Brazil. It provides a synthesis the Brazilian economy during Lula da Silva' second term. It also notes that the government has instituted the Bank Deposit Receipt (RDB) with special guarantee of the Credit Guarantor Fund (FGC), the national private deposit insurance institution.

The Banco Central do Brazil (BACEN) adopted inflation targeting in 1999. This monetary policy regime originates in institutional design which remains crucial today for the expectations management, and is in permanent evolution. After 10 years, the BACEN institutional framework is assessed, asking if there is still room for improvement. Various institutional procedures are analysed, and lessons are drawn from the international experience of a panel of sixteen countries. Some proposals for the BACEN institutional framework are made. [ABSTRACT FROM AUTHOR]

We analyze the relevance of the conventional macroeconomic model supporting the inflation target program and examine its non-viability when interest rate parity is rejected, making it possible to apply sterilized intervention in the foreign exchange market as a monetary policy instrument. In this study, we want to use econometric methods to evaluate whether three Latin American countries (Brazil, Chile and Mexico) -which refer to themselves as having floating currencies, as their central banks adopt inflation target programs, and where a magnified pass-through effect is observed from the exchange rate to inflation -effectively use sterilized intervention in the foreign exchange market to regulate their exchange rates. [ABSTRACT FROM AUTHOR]

An increasing number of developing and emerging economies have adopted an inflation targeting framework for monetary policy during the last two decades. This article investigates the politics of inflation targeting by focusing on the case of Brazil. I argue that the decision to implement an inflation targeting system in 1999 did not only reflect the concerns of political leaders with maintaining electoral support and external credibility. In addition, the choice of this new policy approach was informed by a shift in the technical consensus among Brazilian economists about the most effective way to tame inflationary pressures in a context of high capital mobility. The shift to inflation targeting thus reflected a process of social learning among technical elites, facilitated not only by the failure of the previous policy but also by the successful experience of other inflation targeting countries. Moreover, the evidence presented here suggests that, as the first country to adopt inflation targets in the context of an IMF-supported program, Brazil became a test case and a natural experiment for the redefinition of IMF conditionality and surveillance mechanisms. The paper thus sheds light on a process of reciprocal learning, whereby the IMF not only contributed to collective learning but also learned from the Brazilian case, subsequently becoming an active promoter of inflation targeting among developing countries. [ABSTRACT FROM AUTHOR]