Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022

Detalhes bibliográficos
Autor(a) principal: Flora, Mariana Silva
Data de Publicação: 2023
Outros Autores: Santolin, Roberto
Tipo de documento: preprint
Idioma: por
Título da fonte: SciELO Preprints
Texto Completo: https://preprints.scielo.org/index.php/scielo/preprint/view/6731
Resumo: This article addresses the conditions under which the Brazilian economy was under fiscal or monetary dominance from January 1999, the beginning of the Inflation Targeting Regime, to November 2022. The definition of fiscal dominance used was that of Blanchard (2004), by which Brazil is in fiscal dominance when monetary policy is not able to move the exchange rate. Estimating impulse response functions using Local Projections, allow us to conclude that in the period of high indebtedness there was monetary dominance. This result is consistent with the growth of the fiscal surplus linked to the evolution of interest and appreciation of the real exchange rate. However, when the net domestic debt was relatively low, fiscal dominance was observed, the absence of a fiscal surplus response to interest growth did not allow monetary policy to affect the exchange rate trajectory.
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spelling Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022Dominância fiscal e dominância monetária para o Brasil: uma análise empírica a partir de projeções locais no período de 1999 a 2022dominância fiscaldívida públicataxa de câmbioprojeções locaisfiscal dominancepublic debtexchange ratelocal projectionsThis article addresses the conditions under which the Brazilian economy was under fiscal or monetary dominance from January 1999, the beginning of the Inflation Targeting Regime, to November 2022. The definition of fiscal dominance used was that of Blanchard (2004), by which Brazil is in fiscal dominance when monetary policy is not able to move the exchange rate. Estimating impulse response functions using Local Projections, allow us to conclude that in the period of high indebtedness there was monetary dominance. This result is consistent with the growth of the fiscal surplus linked to the evolution of interest and appreciation of the real exchange rate. However, when the net domestic debt was relatively low, fiscal dominance was observed, the absence of a fiscal surplus response to interest growth did not allow monetary policy to affect the exchange rate trajectory.Este artigo avalia sob quais condições a economia brasileira esteve sob dominância fiscal ou monetária no período de janeiro de 1999, início do Regime de Metas de Inflação, até novembro de 2022. A definição de dominância fiscal utilizada foi a de Blanchard (2004), pela qual o Brasil está sob dominância fiscal quando a política monetária não é capaz de controlar a taxa de câmbio. Os resultados alcançados neste artigo, por meio de análises impulso resposta baseado em Projeções Locais, permitem concluir que no período de alto endividamento houve dominância monetária. Tal resultado é condizente com ampliação do superávit fiscal associado à elevação dos juros e à valorização do câmbio real. Porém quando a dívida líquida interna esteve relativamente baixa observou-se dominância fiscal e a ausência de resposta do superávit fiscal ao crescimento dos juros não permitiu que a política monetária afetasse a trajetória do câmbio.SciELO PreprintsSciELO PreprintsSciELO Preprints2023-09-04info:eu-repo/semantics/preprintinfo:eu-repo/semantics/publishedVersionapplication/pdfhttps://preprints.scielo.org/index.php/scielo/preprint/view/673110.1590/0103-6351/7534porhttps://preprints.scielo.org/index.php/scielo/article/view/6731/12757Copyright (c) 2023 Mariana Silva Flora, Roberto Santolinhttps://creativecommons.org/licenses/by/4.0info:eu-repo/semantics/openAccessFlora, Mariana SilvaSantolin, Robertoreponame:SciELO Preprintsinstname:Scientific Electronic Library Online (SCIELO)instacron:SCI2023-09-04T19:42:22Zoai:ops.preprints.scielo.org:preprint/6731Servidor de preprintshttps://preprints.scielo.org/index.php/scieloONGhttps://preprints.scielo.org/index.php/scielo/oaiscielo.submission@scielo.orgopendoar:2023-09-04T19:42:22SciELO Preprints - Scientific Electronic Library Online (SCIELO)false
dc.title.none.fl_str_mv Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
Dominância fiscal e dominância monetária para o Brasil: uma análise empírica a partir de projeções locais no período de 1999 a 2022
title Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
spellingShingle Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
Flora, Mariana Silva
dominância fiscal
dívida pública
taxa de câmbio
projeções locais
fiscal dominance
public debt
exchange rate
local projections
title_short Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
title_full Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
title_fullStr Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
title_full_unstemmed Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
title_sort Fiscal dominance and monetary dominance in Brazil: An empirical analysis using Local Projections from 1999 to 2022
author Flora, Mariana Silva
author_facet Flora, Mariana Silva
Santolin, Roberto
author_role author
author2 Santolin, Roberto
author2_role author
dc.contributor.author.fl_str_mv Flora, Mariana Silva
Santolin, Roberto
dc.subject.por.fl_str_mv dominância fiscal
dívida pública
taxa de câmbio
projeções locais
fiscal dominance
public debt
exchange rate
local projections
topic dominância fiscal
dívida pública
taxa de câmbio
projeções locais
fiscal dominance
public debt
exchange rate
local projections
description This article addresses the conditions under which the Brazilian economy was under fiscal or monetary dominance from January 1999, the beginning of the Inflation Targeting Regime, to November 2022. The definition of fiscal dominance used was that of Blanchard (2004), by which Brazil is in fiscal dominance when monetary policy is not able to move the exchange rate. Estimating impulse response functions using Local Projections, allow us to conclude that in the period of high indebtedness there was monetary dominance. This result is consistent with the growth of the fiscal surplus linked to the evolution of interest and appreciation of the real exchange rate. However, when the net domestic debt was relatively low, fiscal dominance was observed, the absence of a fiscal surplus response to interest growth did not allow monetary policy to affect the exchange rate trajectory.
publishDate 2023
dc.date.none.fl_str_mv 2023-09-04
dc.type.driver.fl_str_mv info:eu-repo/semantics/preprint
info:eu-repo/semantics/publishedVersion
format preprint
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://preprints.scielo.org/index.php/scielo/preprint/view/6731
10.1590/0103-6351/7534
url https://preprints.scielo.org/index.php/scielo/preprint/view/6731
identifier_str_mv 10.1590/0103-6351/7534
dc.language.iso.fl_str_mv por
language por
dc.relation.none.fl_str_mv https://preprints.scielo.org/index.php/scielo/article/view/6731/12757
dc.rights.driver.fl_str_mv Copyright (c) 2023 Mariana Silva Flora, Roberto Santolin
https://creativecommons.org/licenses/by/4.0
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Copyright (c) 2023 Mariana Silva Flora, Roberto Santolin
https://creativecommons.org/licenses/by/4.0
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv SciELO Preprints
SciELO Preprints
SciELO Preprints
publisher.none.fl_str_mv SciELO Preprints
SciELO Preprints
SciELO Preprints
dc.source.none.fl_str_mv reponame:SciELO Preprints
instname:Scientific Electronic Library Online (SCIELO)
instacron:SCI
instname_str Scientific Electronic Library Online (SCIELO)
instacron_str SCI
institution SCI
reponame_str SciELO Preprints
collection SciELO Preprints
repository.name.fl_str_mv SciELO Preprints - Scientific Electronic Library Online (SCIELO)
repository.mail.fl_str_mv scielo.submission@scielo.org
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