André Minella

Inflation Targeting in Emerging Market Economies

This paper assesses inflation targeting in emerging market economies (EMEs) and develops applied prescriptions for the conduct of monetary policy and inflation-targeting design in EMEs. We verify that EMEs have faced more acute trade-offs-higher output and inflation volatility-and worse performance than developed economies. These results stem from more pronounced external shocks, lower credibility, and a lower level of development of institutions in these countries. To improve their performance, we recommend high levels of transparency and communication with the public and the development of more stable institutions. At an operational level, we propose a procedure that a central bank under inflation targeting can apply and communicate when facing strong supply shocks, and we suggest a monitoring structure for an inflation-targeting regime under an International Monetary Fund (IMF) program.

Monetary Policy and Inflation in Brazil (1975-2000): A VAR Estimation

This paper investigates monetary policy and basic macroeconomic relation-ships involving output, inflation rate, interest rate, and money in Brazil. Based on a vector autoregressive (VAR) estimation, it compares three different periods: moderately increasing inflation (1975-1985), high inflation (1985-1994), and low inflation (1994-2000). The main results are the following: (1) monetary policy shocks have significant effects on output; (2) monetary policy shocks do not induce a reduction in the inflation rate in the first two periods, but there are indications that they have gained power to affect prices after the Real Plan was launched; (3) monetary policy does not usually respond rapidly or actively to inflation-rate and output innovations; (4) in the recent period, the interest rate responds intensely to financial crises; (5) positive interest-rate shocks are accompanied by a decline in money in all the three periods; (6) the degree of inflation persistence is substantially lower in the recent period.

Nonlinear mechanisms of the exchange rate pass-through: a Phillips curve model with threshold for Brazil

This paper investigates the presence of nonlinear mechanisms of the pass-through from exchange rate to inflation in Brazil. In particular, it estimates a Phillips curve with a threshold for the pass-through. The paper examines whether the short-run magnitude of the pass-through is affected by the business cycle, direction and magnitude of the exchange rate change, and volatility of the exchange rate. The results indicate that the short-run pass-through is higher when the economy is booming, when the exchange rate depreciates above some threshold and when the exchange rate volatility is lower.

Produção industrial no Brasil: uma análise de dados em tempo real

A recente literatura sobre analise de dados em tempo real tem mostrado que diversas medidas de atividade economica passam por importantes revisoes de dados ao longo do tempo, implicando limitacoes relevantes para o uso dessas medidas. Organizamos um conjunto de dados de producao industrial (PI) em tempo real para o Brasil e avaliamos a extensao na qual as series de crescimento e hiato da PI sao revisadas. Encontramos revisoes substanciais de crescimento mensal, da media movel trimestral e do hiato da PI.