Interest rate and monetary transmition mechanisms in Brazil

Ricardo de Menezes Barboza ()

Brazilian Journal of Political Economy, 2015, vol. 35, issue 1, 133-155

Abstract: This paper develops the hypothesis that the Brazilian interest rate is high as a result of partially obstructed monetary transmission mechanisms. Transmission failures arise due to the following characteristics of the Brazilian economy: (i) segmentation of the credit market; (ii) low penetration of free credit within the income determination process; (iii) truncated term structure of interest rates; (iv) participation of LFT’s in public debt; (v) participation of administered prices in the consumer price index. To achieve this result, the paper explores the BMW model and provides some preliminary evidence. JEL Classification: E40; E43; E52.

Keywords: monetary transmission mechanism; interest rate; monetary policy (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ekm:repojs:v:35:y:2015:i:1:p:133-155:id:218

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