Fiscal Sustainability and Monetary versus Fiscal Dominance: Evidence from Brazil, 1991-2000
AbstractUnder a monetary dominant (MD) regime, the primary surplus adjusts to limit debt growth, permitting monetary policy to be conducted independently of fiscal financing requirements. In Brazil, some evidence favours an MD regime for 1995-1997, but not for the decade of the 1990s as a whole. While fiscal adjustments of 1999 yielded a primary surplus of about 3% of GDP, consistent with solvency, a credible MD regime would require further adjustments of the primary surplus if debt increases, growth falls, or interest rates rise.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 02/5.
Date of creation: 01 Jan 2002
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Other versions of this item:
- Evan Tanner & Alberto Ramos, 2003. "Fiscal sustainability and monetary versus fiscal dominance: evidence from Brazil, 1991-2000," Applied Economics, Taylor & Francis Journals, vol. 35(7), pages 859-873.
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