Sustainability of the Brazilian fiscal policy and central bank independence
Viviane Luporini ()
Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais
This paper analyses the sustainability of fiscal policy in Brazil since the financial reform of 1965 and discusses how the relationship between the Treasury and the Central Bank has determined the federal government's capacity to finance itself. A sustainable policy is defined as one such that the discounted government debt as a ratio to GDP is backed by expected primary surpluses of equal present-value. In the context of an infinite-horizon framework, sustainability is tested through the mean-zero stationarity of the discounted debt/GDP ratio. Although the overall results indicate sustainability, tests on sub-samples show that the fiscal policy was sustainable prior to 1980, but it assumed an unsustainable path during the 1980s and early 1990s.
Keywords: fiscal policy; federal debt; central bank independence; Brazil (search for similar items in EconPapers)
JEL-codes: E5 E62 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Published in Revista Brasileira de Economia, 2000, vol. 54, no. 2. pp. 201-226.
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cdp:texdis:td125
Ordering information: This working paper can be ordered from
Cedeplar-FACE-UFMG Av. Antonio Carlos, 6627 Belo Horizonte, MG 31270-901 Brazil
Access Statistics for this paper
More papers in Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais Cedeplar-FACE-UFMG Av. Antonio Carlos, 6627 Belo Horizonte, MG 31270-901 Brazil. Contact information at EDIRC.
Bibliographic data for series maintained by Gustavo Britto ().