THE IMPORTANCE OF CREDIBILITY FOR THE CONDUCT OF MONETARY POLICY AND INFLATION CONTROL:

THEORETICAL MODEL AND EMPIRICAL ANALYSIS FOR BRAZIL UNDER INFLATION TARGETING

Autores

  • Gabriel Caldas Montes Universidade Federal Fluminense
  • Alexandre Curi Universidade Federal Fluminense

Palavras-chave:

inflation targeting, credibility, interest rate, inflation

Resumo

This article presents a theoretical model in order to show when the monetary authority is committed to the goal of price stability, the gain of credibility produces a better result in terms of inflation, and reduces the volatility of the basic interest rate. Moreover, the article provides empirical evidence that the gain of credibility is crucial to reduce the volatility of the basic interest as well as the inflation rate in Brazil. The findings suggest credibility plays a key role for the conduct of monetary policy and inflation control.

Biografia do Autor

Gabriel Caldas Montes, Universidade Federal Fluminense

Professor da Faculdade de Economia e do Programa de Pós-Graduação em Economia da Universidade Federal Fluminense. Bolsista de Produtividade em Pesquisa 2 do CNPq.

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Publicado

2022-01-05

Como Citar

Montes, G. C., & Curi, A. (2022). THE IMPORTANCE OF CREDIBILITY FOR THE CONDUCT OF MONETARY POLICY AND INFLATION CONTROL:: THEORETICAL MODEL AND EMPIRICAL ANALYSIS FOR BRAZIL UNDER INFLATION TARGETING. Planejamento E Políticas Públicas, (46). Recuperado de //www.ipea.gov.br/ppp/index.php/PPP/article/view/508