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Central Bank preferences and monetary rules under the inflation targeting regime in Brasil
Brazilian Review of Econometrics
View Archive Info| Field | Value | |
| Title |
Central Bank preferences and monetary rules under the inflation targeting regime in Brasil
Central Bank preferences and monetary rules under the inflation targeting regime in Brasil |
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| Creator |
Aragón, Edilean Kleber da Silva Bejarano; Universidade Federal da Paraíba
Portugal, Marcelo Savino; Universidade Federal do Rio Grande do Sul. Faculdade de Ciências Econômicas |
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| Subject |
Central Bank preferences; Optimal monetary policy; Inflation targets
C61; E52; E58 Central Bank preferences; Optimal monetary policy; Inflation targets C61; E52; E58 |
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| Description |
The estimated interest rate rules are reduced form equations and for that reason they do not directly reveal anything about the structural parameters of monetary policy. In this paper, we seek to further elucidate the Brazilian monetary policy under the inflation targeting regime by calibrating Central Bank preferences. More specifically, we calibrate the policymaker’s loss function by choosing the preference parameter values which minimize the deviation between the optimal and actual paths of the basic interest rate (Selic). Our results indicate that the Central Bank has adopted a flexible inflation target regime and placed some greater weight upon inflation stabilization. We also find out that the monetary authority’s concern with interest rate smoothing has been far deeper than with output stabilization
The estimated interest rate rules are reduced form equations and for that reason they do not directly reveal anything about the structural parameters of monetary policy. In this paper, we seek to further elucidate the Brazilian monetary policy under the inflation targeting regime by calibrating Central Bank preferences. More specifically, we calibrate the policymaker’s loss function by choosing the preference parameter values which minimize the deviation between the optimal and actual paths of the basic interest rate (Selic). Our results indicate that the Central Bank has adopted a flexible inflation target regime and placed some greater weight upon inflation stabilization. We also find out that the monetary authority’s concern with interest rate smoothing has been far deeper than with output stabilization |
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| Publisher |
Sociedade Brasileira de Econometria
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| Date |
2009-05-01
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Format |
application/pdf
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| Identifier |
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/2697
10.12660/bre.v29n12009.2697 |
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| Source |
Brazilian Review of Econometrics; Vol 29, No 1 (2009); 79-109
Brazilian Review of Econometrics; Vol 29, No 1 (2009); 79-109 1980-2447 |
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| Language |
eng
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| Relation |
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/2697/1826
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