Pro-cyclical fiscal policy in Brazil: long- and short-term relationships using cointegration and error correction model (2005-2015). (2017)

• Record Type: Journal Article
• Authors: Moreira, Ricardo Ramalhete
• Is Part Of: International journal of economic policy in emerging economies. Volume 10:Number 2(2017)
• Page Start: 171
• Page End: 184
• Publication Date: 2017
• Subjects: public debt/GPP ratio -- fiscal rule -- inflation -- Brazil; Russia (Federation) -- Economic policy -- 1991- -- Periodicals; Former Soviet republics -- Economic policy -- 1991- -- Periodicals; China -- Economic policy -- 1991- -- Periodicals; 338.947
• Languages: English
• ISSNs: 1752-0452

Abstract

This article analyses the nature of the fiscal rule in Brazil, during the period from January 2005 to April 2015, by using a VEC model. The main findings indicate that Brazil's fiscal policy is a pro-cyclical one regarding public debt and inflation, thus contributing to understand why the public debt/GDP ratio presents a unit root over the last years. Moreover, it means that fiscal reactions were not consistent with the inflation targeting regime in Brazil.