Towards credibility from inflation targeting: the Brazilian experience
This article analyses the use of the basic interest rate after the adoption of inflation targeting in Brazil and the credibility of this monetary regime through two indices that consider the Cukierman and Meltzer (1986) definition for credibility. It also shows the main theoretical and practical motives for changes in the conduction of the monetary policy in the 1970s; the way that inflation targeting strategy is inserted in rules vs. discretion analysis; and the main points that characterize the literature concerning inflation targeting. The findings denote that the strategy implemented in Brazil is not a good mechanism to develop credibility.
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Volume (Year): 39 (2007)
Issue (Month): 20 ()
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References listed on IDEAS
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- Philip Arestis & Fernando Ferrari-Filho & Luiz Fernando de Paula, 2011.
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- de Mendonça, Helder Ferreira & de Guimarães e Souza, Gustavo José, 2009. "Inflation targeting credibility and reputation: The consequences for the interest rate," Economic Modelling, Elsevier, vol. 26(6), pages 1228-1238, November.
- Helder Ferreira de MendonÃ§a & José Simao Filho, 2008. "Macroeconomic Effects of Central Bank Transparency: The Case of Brazil," Cato Journal, Cato Journal, Cato Institute, vol. 28(1), pages 117-137, Winter.
- Helder Ferreira de Mendonca & Rubens Teixeira da Silva, 2009. "Fiscal effect from inflation targeting: the Brazilian experience," Applied Economics, Taylor & Francis Journals, vol. 41(7), pages 885-897.
- Helder Mendonça & Renato Villela Loures, 2009. "Market discipline in the Brazilian banking industry: an analysis for the subordinated debt holders," Journal of Regulatory Economics, Springer, vol. 36(3), pages 286-307, December.
- de Mendonça, Helder Ferreira & de Guimarães e Souza, Gustavo José, 2012. "Is inflation targeting a good remedy to control inflation?," Journal of Development Economics, Elsevier, vol. 98(2), pages 178-191.
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