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Inflation Targeting in Brazil: Reviewing Two Years of Monetary Policy 1999/00

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  • Pedro Fachada
Abstract
In July 1999, Brazil implemented a formal inflation-targeting framework for monetary policy, less than six months after moving to a floating exchange rate regime. This work evaluates the initial years of the Brazilian experience with inflation targeting. During the period the inflation rate remained in the targeted range, despite the several external and domestic adverse shocks that hit the Brazilian economy. The new monetary framework proved to be fundamental to enhance transparency and to guide expectations, thus preventing transitory inflation surges to develop into permanent inflation increases.

Suggested Citation

  • Pedro Fachada, 2001. "Inflation Targeting in Brazil: Reviewing Two Years of Monetary Policy 1999/00," Working Papers Series 25, Central Bank of Brazil, Research Department.
    • Handle: RePEc:bcb:wpaper:25
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    File URL: https://www.bcb.gov.br/content/publicacoes/WorkingPaperSeries/wps25.pdf
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    References listed on IDEAS

    as
    1. Pedro H. Albuquerque, 2001. "Os Impactos Econômicos da CPMF: Teoria e Evidência," Working Papers Series 21, Central Bank of Brazil, Research Department.
    2. Victorio Y. T. Chu & Márcio I. Nakane, 2001. "Credit Channel without the LM Curve," Working Papers Series 20, Central Bank of Brazil, Research Department.
    3. Pedro H. Albuquerque, 2003. "A practical log-linear aggregation method with examples: heterogeneous income growth in the USA," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(6), pages 665-678.
    4. Michael F. Bryan & Stephen G. Cecchetti, 2001. "A Note on the Efficient Estimation of Inflation in Brazil," Working Papers Series 11, Central Bank of Brazil, Research Department.
    5. Pedro H. Albuquerque, 2003. "A practical log-linear aggregation method with examples: heterogeneous income growth in the USA," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(6), pages 665-678.
    6. Emanuel-Werner Kohlscheen, 2000. "Estimating Exchange Market Pressure and Intervention Activity," Working Papers Series 9, Central Bank of Brazil, Research Department.
    7. Eduardo Lundberg, 2000. "Política Monetária e Supervisão do Sistema Financeiro Nacional no Banco Central do Brasil," Working Papers Series 2, Central Bank of Brazil, Research Department.
    8. Francisco Marcos Rodrigues Figueiredo, 2001. "Evaluating Core Inflation Measures for Brazil," Working Papers Series 14, Central Bank of Brazil, Research Department.
    9. Sérgio Ribeiro da Costa Werlang, 2000. "Private Sector Participation: A Theoretical Justification of the Brazilian Position," Working Papers Series 3, Central Bank of Brazil, Research Department.
    10. Marcelle Chauvet, 2000. "Leading Indicators of Inflation for Brazil," Working Papers Series 7, Central Bank of Brazil, Research Department.
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    Cited by:

    1. Tarsila Segalla Afanasieff & Priscilla Maria Villa Lhacer & Márcio I. Nakane, 2002. "The Determinants of Bank Interest Spread in Brazil," Money Affairs, CEMLA, vol. 0(2), pages 183-207, July-Dece.
    2. Fredj Jawadi & Sushanta Kumar Mallick & Ricardo Magalhães Sousa, 2014. "Nonlinear monetary policy reaction functions in large emerging economies: the case of Brazil and China," Applied Economics, Taylor & Francis Journals, vol. 46(9), pages 973-984, March.
    3. Marco Matsumura & Ajax Moreira, 2011. "Assessing macro influence on Brazilian yield curve with affine models," Applied Economics, Taylor & Francis Journals, vol. 43(15), pages 1847-1863.

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