DECOMPOSITION OF BRAZILIAN GDP’S CYCLES

Celso de Campos Toledo Neto () and Eraldo Genin Fiori ()
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Celso de Campos Toledo Neto: Universidade de São Paulo (USP)
Eraldo Genin Fiori: Universidade Presbiteriana Mackenzie (UPM)

Revista de Economia Mackenzie (REM), 2009, vol. 7, issue 1, 43-62

Abstract: The paper applies a structural approach to isolate the “product gap†. The application of a methodology for accounting of cycles allows target fluctua-tions of Brazilian industrial production originated in productivity shocks and shocks that distort the choices of families between work and consumption. This structural decay to set a measure of potential output more tuned to the economic theory. It was found that most of the cyclical fluctuations of the industrial product is due to shocks in productivity. If this is true, “the product gap†measured through filters contains, actually, changes in product potential. Consequently, monetary policy could be calibrated so perverse. The methodo-logical change significantly affect the relevant results of the inflation target re-levant model. In particular, the effect of real interest on the product gap measu-red this way is significantly less than that measured in conventional form.

Keywords: Economic cycles; Monetary policy; Inflation target. (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:aft:journl:v:7:1:2009:jan:apr:p:43-62

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