Expectations about monetary policy and the behaviour of the central bank

Resumo

Using microdata from the IBRE-FGV Consumer Survey we investigate if Brazilianconsumers form expectations consistent with the Taylor rule and if the consistencychanges according to the monetary policy conducted by the Central Bank of Brazil.We find that the public can properly understand the relationship between interestrates and inflation in the rule framework, but not the relationship between interestrates and unemployment, probably due to the single mandate adopted in Braziland some features of the data. The partial effects methodology introduced by Carvalhoand Nechio (2014) confirm these results. Furthermore, we also find that theconsistency of expectations significantly drops during periods that the central bankdeviates from the Taylor rule, indicating that a higher tolerance to inflationaryshocks can damage the coordination of society’s expectations.

Ficha do documento

Tipo

Artigo científico

Ano

2017

Instituição

Sociedade Brasileira de Econometria

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso aberto

DOI

10.12660/bre.v37n22017.55248

Identificador

oai:repositorio.fgv.br:10438/26216

Temas

Economia

Palavras-chave

Consumer expectationsMonetary policyTaylor ruleExpectativas dos consumidoresPolítica MonetáriaRegra de TaylorEconomiaPolítica monetária - BrasilBanco Central do BrasilTaylor, Regra deComportamento do consumidor