POLÍTICA MONETÁRIA ÓTIMA EM UM CONTEXTO DE ELEVADA DÍVIDA PÚBLICA: O CASO DO BRASIL

José Franco Medeiros de Morais, Joaquim Pinto de Andrade and Maria Luiza Falcão Silva

Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]

Abstract: This paper calculates the optimal monetary policy rule for Brazilian economy, assuming that monetary authority adopts a flexible inflation targeting regime in which, besides the inflation target, there is also a target for public debt/GDP ratio. According to the open economy proposed model, risk premium is generated by high public debt. After estimating the parameters, Bellman equation is applied to determine the optimal monetary policy rule. Results suggest that when a target for public debt/GDP is taken into account in the loss function, monetary policy responds less aggressively to inflation shocks, while easing monetary policy becomes optimal response to positive shocks to public debt and risk premium.

JEL-codes: C61 E63 E52 (search for similar items in EconPapers)
Date: 2004

Downloads: (external link)
http://www.anpec.org.br/encontro2004/artigos/A04A030.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:anp:en2004:030

Ordering information: This working paper can be ordered from
Secretaria da ANPEC Rua Tiradentes, 17 - Ingá Niterói, RJ 24210-510 Brazil

Access Statistics for this paper

More papers in Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]
Address: Secretaria da ANPEC Rua Tiradentes, 17 - Ingá Niterói, RJ 24210-510 Brazil
Contact information at EDIRC.
Series data maintained by Hugo E. A. da Gama Cerqueira (). This e-mail address is bad, please contact .