The paper introduces a system dynamics Taylor rule model for monetary policy feedback between the real interest rate, inflation and GDP growth for the 2004 to 2011 period in Brazil. The nonlinear Taylor rule for interest rate changes considers gaps and dynamics of GDP growth and inflation as well as monetary policy sluggishness. The results outline a high degree of endogenous feedback for monetary policy and inflation, while GDP growth remains strongly exposed to exogenous economic conditions. Furthermore, stocks of absolute monetary policy flows provide a new mean for assessing empirical monetary policy moves. The stocks show that Brazilian monetary policy has been more driven by growth than by inflation considerations in the period under investigation. Moreover, simulation exercises highlight the potential effects of the new BCB strategy initiated in August 2011 and also consider a recession avoidance Taylor rule. In total, the strong historical fit of the Taylor rule model calls for an application of the model to other economies.

This is the whole item.

Date created

• 2012 July 22-2012 July 26

Type

• Document

Processing Activity

• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

License

• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
  Contact Us for questions or additional rights.

ITEM CONTEXT

Part of

ab062956a014e30aaf02b44e9d33088e

Scope and Contents

Part of

23d738ba88f8333bc39725f9cb5bd0b8

Scope and Contents

Part of

b90fd81032b7dbf0c9f90f3dc3a33f1c

Scope and Contents

Collection

System Dynamic Society Records

Scope and Contents

Collecting area

• This collection is part of the University Archives