An alert on the recent fall of the fiscal reaction in Brazil
ABSTRACT Recent evaluations of how the Brazilian government’s primary surplus reacts to the evolution of the debt to GDP ratio convey two important (and worrisome) messages: first, the reaction function has been almost steadily decreasing since 2012. Second, it has turned from positive to negative figures as of October 2017. With effective real interest rates (over the net government debt) higher than prospects of GDP growth, negative figures for the fiscal reaction function mean a non-sustainable debt trajectory. Therefore, significant fiscal adjustments are required in the short run.
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Centro de Economia Política
2019
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oai:scielo:S0101-315720190002000032019-04-29An alert on the recent fall of the fiscal reaction in BrazilCAMPOS,EDUARDO LIMACYSNE,RUBENS PENHA Brazil public debt fiscal reaction fiscal sustainability Kalman filter ABSTRACT Recent evaluations of how the Brazilian government’s primary surplus reacts to the evolution of the debt to GDP ratio convey two important (and worrisome) messages: first, the reaction function has been almost steadily decreasing since 2012. Second, it has turned from positive to negative figures as of October 2017. With effective real interest rates (over the net government debt) higher than prospects of GDP growth, negative figures for the fiscal reaction function mean a non-sustainable debt trajectory. Therefore, significant fiscal adjustments are required in the short run.info:eu-repo/semantics/openAccessCentro de Economia PolíticaBrazilian Journal of Political Economy v.39 n.2 20192019-06-01info:eu-repo/semantics/articletext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572019000200003en10.1590/0101-31572019-2976 |
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CAMPOS,EDUARDO LIMA CYSNE,RUBENS PENHA |
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CAMPOS,EDUARDO LIMA CYSNE,RUBENS PENHA An alert on the recent fall of the fiscal reaction in Brazil |
| author_facet |
CAMPOS,EDUARDO LIMA CYSNE,RUBENS PENHA |
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CAMPOS,EDUARDO LIMA |
| title |
An alert on the recent fall of the fiscal reaction in Brazil |
| title_short |
An alert on the recent fall of the fiscal reaction in Brazil |
| title_full |
An alert on the recent fall of the fiscal reaction in Brazil |
| title_fullStr |
An alert on the recent fall of the fiscal reaction in Brazil |
| title_full_unstemmed |
An alert on the recent fall of the fiscal reaction in Brazil |
| title_sort |
alert on the recent fall of the fiscal reaction in brazil |
| description |
ABSTRACT Recent evaluations of how the Brazilian government’s primary surplus reacts to the evolution of the debt to GDP ratio convey two important (and worrisome) messages: first, the reaction function has been almost steadily decreasing since 2012. Second, it has turned from positive to negative figures as of October 2017. With effective real interest rates (over the net government debt) higher than prospects of GDP growth, negative figures for the fiscal reaction function mean a non-sustainable debt trajectory. Therefore, significant fiscal adjustments are required in the short run. |
| publisher |
Centro de Economia Política |
| publishDate |
2019 |
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http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572019000200003 |
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