An RBC model of the Brazilian economy with stylized fiscal shocks

Rodrigo Mendes Pereira

Revista Brasileira de Economia - RBE, 2022, vol. 75, issue 4

Abstract: This paper builds a small size dynamic stochastic general equilibrium (DSGE) model with government, aiming to replicate key features of the Brazilian economy. I first calibrate and then I use Bayesian methods to estimate the model for Brazil, with 20 years of quarterly aggregate data. Contrary to the conventional knowledge, I find mixed evidence on the pro-cyclicality of the fiscal policy in Brazil. Moreover, the results suggest that tax rate changes have been used to counter changes in the level of government indebtedness, however in a small degree if compared to other international evidence.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgrbe:v:75:y:2022:i:4:a:80065

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