This work revisits the recent disinflation process in Brazil and finds that solely the agents' perception that a policy rupture could occur is capable of triggering a change in the way firms and households used to behave in their pricing and consuming decisions. This change was captured by...

This paper aims to contribute to the research agenda on the sources of price rigidity. Based on broadly accepted assumptions on the behavior of economic agents, we show that firms’ competition can lead to the adoption of sticky prices as a sub-game perfect equilibrium strategy to optimally...

This paper implements an empirical test of market power for Brazilian banking based on Bresnahan (1982) and Lau (1982). A dynamic version of the test is applied. The results show that the banking industry in Brazil is highly competitive, although the perfect competition hypothesis is rejected....

This paper contributes to fill the large existing gap in the literature on the Brazilian natural rate of unemployment. It reveals not only that the correlation between inflation and unemployment has changed radically since the stabilisation of the economy but, more surprisingly, that it has...

Despite the difficulties involved in the precise determination of equilibrium real interest rates, it seems clear that nominal interest rates has been higher in Brazil than in similar emerging economies. This paper aims to shed light on the possible reasons for this feature of the Brazilian...

Within a dynamic programming approach we derive an optimal rule for the central bank to attain it's inflation targeting goals. The short-run nominal interest rate is used as an instrument to achieve monetary objectives. The model is tested for the Brazilian economy and compared with results...

Between 1999 and 2002, Brazil´s Central Bank sold expressive amounts of dollar-denominated debt and foreign exchange swaps. This paper shows that in periods of high volatility of the exchange rate, first semester of 1999 and second semester of 2002, the Central Bank increased the foreign...

In the aftermath of the 2007-2008 global financial crisis, a series of measures has been proposed to regulate the OTC derivatives market. The motivation is to increase the disclosure of the OTC operations aiming to decrease the probability of crisis. The main objective of this paper is to...

This paper discusses the reasons and effects of the Central Bank of Brazil’s decision to raise the risk weight factors (RWF) of auto loans with high LTV and long maturities in 2010. Concerns with origination standards and risk-underpricing, combined with early warnings of loan non-performance...

This paper aims at investigating the structural relation between patterns of services consumption and income. We focus on how patterns of services consumption adjust to different levels of income by using the perspective of social expansion as a narrative approach for the Brazilian case in the...