Pro-cyclical fiscal policy in Brazil: long- and short-term relationships using cointegration and error correction model (2005-2015)

Ricardo Ramalhete Moreira

International Journal of Economic Policy in Emerging Economies, 2017, vol. 10, issue 2, 171-184

Abstract: This article analyses the nature of the fiscal rule in Brazil, during the period from January 2005 to April 2015, by using a VEC model. The main findings indicate that Brazil's fiscal policy is a pro-cyclical one regarding public debt and inflation, thus contributing to understand why the public debt/GDP ratio presents a unit root over the last years. Moreover, it means that fiscal reactions were not consistent with the inflation targeting regime in Brazil.

Keywords: public debt/GPP ratio; fiscal rule; inflation; Brazil. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:10:y:2017:i:2:p:171-184

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