In 1997, Brazil approved a new law establishing the regulatory framework of oil and gas industry. One of the most important changes was the distribution of petroleum rents to states and Municipalities. The volume received by each municipality varies considerably, since it depends on a range of...

The purpose of this paper is to test if the Brazilian fiscal regime can be classified as non-Ricardian. This question is important since the literature, based on Loyo (1999), argues that the fiscal theory of the price level can provide an explanation for the high inflation observed in Brazil...