Since 2014
The Fiscal Theory of the Price Level and the Interaction of Monetary and Fiscal Policies: The Brazilian Case
Brazilian Review of Econometrics
View Archive Info| Field | Value | |
| Title |
The Fiscal Theory of the Price Level and the Interaction of Monetary and Fiscal Policies: The Brazilian Case
The Fiscal Theory of the Price Level and the Interaction of Monetary and Fiscal Policies: The Brazilian Case |
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| Creator |
Moreira, Tito Belchior S.
e Souza, Geraldo da Silva Almeida, Charles Lima de |
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| Description |
This paper aims to derive an optimal monetary policy rule in a context of fiscal disequilibrium and to empirically test whether Brazil presents active or passive fiscal and monetary policies. We analyze the transmission channels of the fiscal and monetary policies through estimation of a Philips curve and the fiscal IS curve. The results indicate that the fiscal deficit is statistically significant and affects the inflation rate indirectly via output gap. The empirical findings using the Leeper model indicate that the monetary policy is passive whereas the fiscal policy is active. In this context, we found empirical evidence that the Brazilian economy shows a fiscal dominance regime for the period 1995: I to 2006: II.
This paper aims to derive an optimal monetary policy rule in a context of fiscal disequilibrium and to empirically test whether Brazil presents active or passive fiscal and monetary policies. We analyze the transmission channels of the fiscal and monetary policies through estimation of a Philips curve and the fiscal IS curve. The results indicate that the fiscal deficit is statistically significant and affects the inflation rate indirectly via output gap. The empirical findings using the Leeper model indicate that the monetary policy is passive whereas the fiscal policy is active. In this context, we found empirical evidence that the Brazilian economy shows a fiscal dominance regime for the period 1995: I to 2006: II. |
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| Publisher |
Sociedade Brasileira de Econometria
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| Date |
2007-05-01
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion |
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| Format |
application/pdf
application/pdf |
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| Identifier |
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/1573
10.12660/bre.v27n12007.1573 |
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| Source |
Brazilian Review of Econometrics; Vol. 27 No. 1 (2007); 85-106
Brazilian Review of Econometrics; v. 27 n. 1 (2007); 85-106 1980-2447 |
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| Language |
eng
por |
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| Relation |
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/1573/1016
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/1573/1017 |
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