Reviewing Taylor rules for Brazil: was there a turning-point?

Ricardo Ramalhete Moreira ()
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Ricardo Ramalhete Moreira: Federal University of Espírito Santo, BRAZIL

Journal of Economics and Political Economy, 2015, vol. 2, issue 2, 276-289

Abstract: This article finds evidences highlighting that the Brazilian monetary policy is divergent from Taylor principles, from data over January 2005 to May 2013, and using regressions estimated by OLS and GMM. Especially, the inflationary expectations do not show robust effects on the Selic rate, while the inertial degree of the latter denotes a current pro-cyclical bias. Furthermore, the article tested for the effects of the Subprime crisis and the domestic currency undervaluation on the Selic level. The empirical results suggest that the Subprime crisis monetary authorities have preferred to stabilize or expand output, against the inflation stabilization, despite the Brazilian inflation target regime since 1999.

Keywords: Taylor rule; Selic rate; Brazil; OLS; GMM. (search for similar items in EconPapers)
JEL-codes: E17 E52 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ksp:journ1:v:2:y:2015:i:2:p:276-289

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