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In contrast to what both traditional economic theory and the conventional wisdom among most Brazilian macroeconomists would suggest, recent studies point to a low exchange rate elasticity of Brazilian imports. In this study we provide a rationale for this result by revisiting the behavior of...
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Interest rate, exchange rate and the system of inflation target in Brazil. In the consensus view of the Brazilian system of inflation targeting, the core of inflation is due to demand shocks; the rate of interest is set to control demand; and some variation in the exchange rate happens as...
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