Business cycles, expectations and inflation in Brazil: a New-Keynesian Phillips curve analysis

This article analyses Brazil’s recent inflation dynamic, considering different expectations environments within the New-Keynesian Phillips curve framework, to observe how the potential for discretionary behaviour by the monetary authority can interfere in economic agents’ forward-looking expectations, and how that interference can affect the way inflation responds to its inertial component and to business-cycle fluctuations. To that end, the study estimates the New-Keynesian Phillips curve and its hybrid version, using the heteroscedasticity-and-autocorrelation-consistent (HAC) estimator of the generalized method of moments (GMM). The results suggest that, when economic agents possess lower degrees of foresight, inflation will be more sensitive to business-cycle fluctuations the larger is its inertial component.

Bibliographic Details

Main Authors:	Arruda, Elano Ferreira, Oliveira de Olivindo, Maria Thalita Arruda, Castelar, Ivan
Format:	Texto biblioteca
Language:	English
Published:	2018-04
Subjects:	CONDICIONES ECONOMICAS, CICLOS ECONOMICOS, INFLACION, ANALISIS ECONOMICO, MODELOS ECONOMETRICOS, ECONOMIC CONDITIONS, BUSINESS CYCLES, INFLATION, ECONOMIC ANALYSIS, ECONOMETRIC MODELS,
Online Access:	https://hdl.handle.net/11362/43955
Tags:	Add Tag No Tags, Be the first to tag this record!