MONETARY AND EXCHANGE RATE POLICY IN BRAZIL AFTER INFLATION TARGETING

Márcio Holland ()

Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]

Abstract: After strong currency crisis, in January 1999, Brazil implemented flexible exchange rate regime combined with inflation targeting. Some economists believe that emerging markets do not allow the exchange rate to float as much they had announced and therefore they suffer from the fear of floating. However, in this article there is evidence to believe that central banks in the emerging markets care about inflation ratter than exchange rate. The remarkable result found in this article is that the aggressiveness of the interest rate reaction to inflation explains far more the current monetary and exchange rate policy in Brazil than the idea of the fear of floating.

JEL-codes: E31 E37 E52 C22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mac and nep-mon
Date: 2005
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