We evaluate the Liquidity Preference Hypothesis (LPH) for the term structure of interest rates in a different way. Instead of using bond returns as traditional approaches, we use interest rate surveys with market expectations in order to evaluate LPH. This approach allows us to disentangle the...

This paper estimates reduced-form Phillips curves for Brazil with a framework of time series with unobserved components, in the spirit of Harvey (2011). However, we allow for expectations to play a key role using data from the Central Bank of Brazil’s Focus survey. Besides GDP, we also use...

In this paper, we test two static theories of capital structure Static Tradeoff Theory (STT) e a Pecking Order Theory (POT) so as to analyze the capital structure of Brazilian firms. We built the optimum capital structure of firms estimating a state space model with a smooth Kalman Filter. Our...

Since 2000, Banco Central do Brasil (BCB) announces measures of core inflation in its Inflation Reports. Throughout this period, the set of measures has been altered as the result of either the evolution of the Brazilian economy or the incorporation of new approaches to measuring core inflation....

The break-even inflation rate (the difference between nominal and real rates) is the main indicator of future price level. However, inflation expectation is only one of its components. In this article we present a simple economic model in order to split the break-even inflation rate in the...

This article develops leading indicators based on the cross-section of stock returns. The underlying assumption is that any information about future states of nature must be reflected in current stock prices. Three indicators are proposed: the approach employed by Allen et al. (2012), an...

This paper studies steel consumption in Brazil, based on the model of intensity of use, that is, steel consumption per monetary unit of the economy, bringing information that is intended to help understanding the future behavior of steel consumption in the country. Our empirical results indicate...

This paper describes the steady state allocations and prices for small open economies under optimal monetary and fiscal policy in a medium-scale DSGE model. The model encompasses the most common nominal and real rigidities normally found in the literature in a single framework. The Ramsey...

We quantitatively compare three macroeconomic policies in a cash-credit goods framework. The policies are: the optimal one; another one that fully smoothes out oscillations in output; and a simple one that prescribes constant values for tax and monetary growth rates. As often found in the related...

The unemployment rate can be expressed by two components: the probability that an unemployed worker finds a job and the probability that an employed worker becomes unemployed. According to the methodology developed in Shimer (2012) and Elsby et al. (2009) this article calculates these factors...