IDEAS home Printed from https://ideas.repec.org/a/oul/tncr09/v6y2014i1p58-70.html
   My bibliography  Save this article

Influence of Exchange Variation and Demand Conditions in the Determination of IPCA in Brazil

Author

Listed:
  • Erica Oliveira Gonzales

    () (Maring¨¢ State University)

  • Allan Silveira dos Santos

    () (Bras¨ªlia University)

  • Eliane Cristina de Ara¨²jo

    () (State University of Maring¨¢)

Abstract

The objective of this paper is to analyze the exchange rate pass-through in Braziland the importance of demand pressures on prices in the period after the implementation of the inflation-targeting regime. The methodology used was the Vector Error Correction Model (VECM), between three periods January 1999 to May 2011. The results show a high degree of inertia in all periods. Furthermore, they show that when neglecting the inertia, the exchange was the main determinant of price variation in the first period, while in the second period the main causes of inflationary pressures were demand pressures. The results also show that, in the Brazilian case, a significant devaluation in a short period of time can be dangerous to the stability of prices.

Suggested Citation

  • Erica Oliveira Gonzales & Allan Silveira dos Santos & Eliane Cristina de Ara¨²jo, 2014. "Influence of Exchange Variation and Demand Conditions in the Determination of IPCA in Brazil," Transnational Corporations Review, Ottawa United Learning Academy, vol. 6(1), pages 58-70, March.
  • Handle: RePEc:oul:tncr09:v:6:y:2014:i:1:p:58-70
    as

    Download full text from publisher

    File URL: http://tnc-online.net/journal/html/?482.html
    Download Restriction: no

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oul:tncr09:v:6:y:2014:i:1:p:58-70. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Denny Liao) or (Jen Ma). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.