DÍVIDA PÚBLICA BRASILEIRA, DEFAULT E A "NOVA EQUIVALÊNCIA RICARDIANA": UM EXERCÍCIO CLIOMÉTRICO DO BRASIL - IMPÉRIO À ÉPOCA ATUAL

This paper tests the sustainability of the Brazilian public debt throughout its history as an independent nation (1823-2004) by the use of cointegration tests. Since the sample period covers a historical period highlighted by a great deal of political, economic and institutional shifts, recursive tests have also been carried out in order to evaluate the constancy of the cointegrating rank. Initially, the traditional intertemporal budget model (Ricardian Equivalence model) has been suposed, and thus testing the cointegration of government expenditures and revenues. However, the presence of consecutive default or debt restructuring situations concerning the Brazilian public debt, throughout its republican period, suggests an alternative model, in which the sustainability of public debt is achieved by "debt repudiation" ("New Ricardian Equivalence" model). The cointegration tests based on such an alternative model have included dummies for each default or renegotiation period of the public debt ("default dummies"). As a conclusion, one might postulate that the fiscal policy implemented in Brazil during almost all its history as an independent nation, oscillated between authentic sustainability periods (Imperial period) and moments when fiscal sustainability was achieved through debt default or renegotiation (republican period from 1889 to 1943 and from 1983 to 1993) or seigniorage revenues (republican period from 1944 to 1982).