Template-Type: ReDIF-Paper 1.0
Author-Name:  Luiz Gustavo Cassilatti Furlani
Author-Name-First: Luiz Gustavo Cassilatti
Author-Name-Last: Furlani
Author-Name:  Marcelo Savino Portugal
Author-Name-First: Marcelo Savino
Author-Name-Last: Portugal
Author-Name: Márcio Poletti Laurini
Author-Name-First: Márcio Poletti
Author-Name-Last: Laurini
Title: Exchange Rate Movements and Monetary Policy In Brazil: Econometric and Simulation Evidence 
Abstract:  The literature on monetary economy has aroused growing interest in macroeconomics. Due to computational advancements, models have been increasingly 
more complex and accurate, allowing for the in-depth analysis of the relationships between real economic variables and nominal variables. Therefore, using a dynamic stochastic general equilibrium (DSGE) model, based on Gali and Monacelli (2005), we propose and estimate a model for the Brazilian economy by employing Bayesian methods so as to assess whether the Central Bank of Brazil takes exchange rate fluctuations into account in the conduct of monetary policy. The most striking result of the present study is that the Central Bank of Brazil does not directly change the interest rate path due to exchange rate movements. A simulation exercise is also used. Our conclusion is that the economy quickly accommodates shocks induced separately on the exchange rate, on the terms of trade, on the interest rate, and on global inflation.
Length:  32 pages
Creation-Date:  2008
Order-URL: https://repositorio.insper.edu.br/handle/11224/5793
File-URL: https://repositorio.insper.edu.br/handle/11224/5793
File-Format: text/html
File-Function: Full text
Number: 013
Handle: RePEc:aap:wpaper:013