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-integration analysis to estimate simultaneously a monetary reaction function and the determinants of expected inflation for Brazil, Chile …, Colombia and Mexico in the post-1999 period. It also tests for the presence of volatility spillovers between the monetary … examination, and ii) greater volatility in the monetary stance leads to higher volatility in expected inflation in Brazil …
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"This paper deals with the relationship between inflation targeting and exchange rates. I address three specific issues: first, I analyze the effectiveness of nominal exchange rates as shock absorbers in countries with inflation targeting. This issue is closely related to the magnitude of the...
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We estimate a dynamic, stochastic, general equilibrium model of the Brazilian economy taking into account the transition from a currency peg to inflation targeting that took place in 1999. The estimated model exhibits quite different dynamics under the two monetary regimes. We use it to produce...
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