stabilization plans launched in Brazil over the past 18 years. Newly implemented low-inflation measures lacked credibility and …The paper analyzes how an error in inflation expectations helped maintain high interest rates in the wake of the major … forced agents to expect a higher inflation rate than the one effectively observed, creating a wedge between ex-post and ex …

Based on market expectations reported by the Central Bank of Brazil for the SELIC interest rate, the IPCA inflation … expectations about the IPCA inflation rate and the SELIC interest rate have a strong negative relationship with central bankers …

inflation target and its exposure to political pressures. We apply our methodology to Brazil as well to highlight its advantages … based on the changes in actual inflation rate do not perform very well in environments of chronic inflation. We design an … the central bank’s ability to lower inflation expectations towards its inflation target via current interest rate …