Balliester Reis, T orcid.org/0000-0002-8566-9787 (2019) Why Are Policy Real Interest Rates So High in Brazil? An Analysis of the Determinants of the Central Bank of Brazil’s Real Interest Rate. International Journal of Political Economy, 47 (2). pp. 178-198. ISSN 0891-1916
Abstract
This article discusses the determinants of Brazil’s high policy real interest rates by considering two opposing views, the orthodox and heterodox approaches. While orthodox authors defend the position that bad domestic policies are the cause of the high interest rate, heterodox economists claim that the international financial system and orthodox policies influence the level of the policy rate in Brazil. The aim of this study is to assess whether the proposed arguments can be supported when comparing Brazilian real interest rates with other developing countries under the same monetary regime. A panel regression with 11 developing countries over the period 1996–2015 is estimated to test these hypotheses. The conclusion is that, although the orthodox and heterodox arguments are both coherent, when comparing stylized facts and testing the hypotheses econometrically neither is sufficient to elucidate the Brazilian case. The article concludes by suggesting that there might be political causes of the high real interest rates in Brazil such as a politically influential rentier class.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | Published with license by Taylor & Francis Group, LLC . This is an Accepted Manuscript of an article published by Taylor & Francis in International Journal of Political Economy on 28 Feb 2019, available online: http://www.tandfonline.com/10.1080/08911916.2018.1497580. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Brazil; Central Bank; interest rate; monetary policy; political economy |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 06 Jun 2018 11:05 |
Last Modified: | 28 Aug 2020 00:38 |
Status: | Published |
Publisher: | Taylor & Francis |
Identification Number: | 10.1080/08911916.2018.1497580 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:131706 |