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Trade openness and inflation dynamics in Brazil

Author

Listed:
  • Fernando Marques Mansilla

    (Federal University of Ceará)

  • Elano Ferreira Arruda

    (Federal University of Ceará)

  • Roberto Tatiwa Ferreira

    (Federal University of Ceará)

Abstract

This work examines the possible asymmetries of Brazil's inflation dynamics in distinct trade openness regimes. For that purpose, we estimate a nonlinear Hybrid New Keynesian Phillips Curve (HNKPC) with the degree of trade openness as the threshold variable. We use monthly data between January 2002 and December 2017 and econometric models with threshold effects in the presence of endogenous regressors. The results indicate the absence of a tradeoff between inflation and unemployment and of inflation inertia in the regime with the most openness. However, in the regime with the least openness, these variables are statistically significant.

Suggested Citation

  • Fernando Marques Mansilla & Elano Ferreira Arruda & Roberto Tatiwa Ferreira, 2020. "Trade openness and inflation dynamics in Brazil," Economics Bulletin, AccessEcon, vol. 40(3), pages 1948-1957.
    • Handle: RePEc:ebl:ecbull:eb-19-00658
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Trade Openness; Phillips Curve; Inflation;
    All these keywords.

    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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