publication . Preprint . 2009

Monetary Channels in Brazil through the Lens of a Semi-Structural Model

André Minella; Nelson F. Souza-Sobrinho;
Open Access
  • Published: 01 Apr 2009
Abstract
We develop and estimate a medium-size, semi-structural model for Brazil's economy during the inflation targeting period. The model captures key features of the economy, and allows us to investigate the transmission mechanisms of monetary policy. We decompose the monetary channels into household interest rate, firm interest rate, and exchange rate channels. We find that the household interest rate channel plays the most important role in explaining output dynamics after a monetary policy shock. In the case of inflation, however, both the household interest rate and the exchange rate channels are the main transmission mechanisms. Furthermore, using a proxy for an ...

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