Metas de inflação e investimento: o caso do Brasil

Marco Flávio Cunha Resende and Fabiana Lima
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Fabiana Lima: PUC-SP

Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais

Abstract: In this paper two hypotheses about the relationship between monetary policy and investment in the context of the inflation target system were tested. One of these hypotheses is based on the idea of neutrality of money, and the other hypothesis is based on the reject of that idea. An investment equation for the Brazilian economy was estimated (1848-2005), and a proxy for current expectations about monetary policy was adopted as one of the independent variables of the equation. Structural break tests for the equation were conduced by the assumption of changes on the coefficients of the equation after the inflation target system implementation. Another equation using piece-wise dummy variable was estimated. The results highlight that a negative correlation between current expectation of restrictive monetary policy and current investment rose after the inflation target system implementation.

Keywords: inflation target; monetary policy; investment (search for similar items in EconPapers)
JEL-codes: E12 E13 E22 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-lam and nep-mac
Date: 2007-08

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