Márcio Holland

Pode a incerteza jurisdctional e os controles de capitais explicarem as altas taxas reais de juros no Brasil

This paper tests the assertion, popularized by Arida, Bacha, and Lara-Resende (2005), that risks associated with the jurisdiction and currency inconvertibility are relevant determinants of the high level of short-term real interest rates in Brazil. The results are by and large unfavorable not only to their conjecture, but also to variants of their argument. The results further indicate that traditional monetary and fiscal factors are far more relevant to explain the level of short-term real interest rates than the binomial jurisdictional uncertainty/ currency inconvertibility is.

A panel-data analysis of interest rates and dollarization in Brazil

Contents: 1. Introduction; 2. Analytical Model; 3. Empirical Findings; 4. The Mistery of High Interest Rates in Brazil; 5. Conclusions; 6. Appendix I; 7. Appendix II; We investigate the role of financial dollarization and systemic risks in the determination of real interest rates in Brazil. In a simple currency- choice portfolio model, we show that a strategy of reducing dollari- zation, if it fails to address fundamental macroeconomic risks, leads to higher domestic real interest rates. We confirm this prediction in an empirical panel-based model, involving systemic risk variables, but find that the effect is small after controlling for the risks of dilution and default. We apply our empirical estimates to the case of Brazil - a na- tural case study given its low degree of financial dollarization and very high real interest rates. The estimated model is unable to explain the high interest rate levels in the aftermath of Brazils 1994 inflation sta- bilization. However, since the adoption in 1999 of inflation targeting and floating exchange rates, Brazils real interest rates are found to be gradually converging to the models predicted values. The estimation also shows that further reductions in Brazils real interest rates could be achieved through sound fundamentals that led to investment-grade status rather than financial dollarization.

Crescimento econômico secular no Brasil, modelo de thirlwall e termos de troca

Long-run economic growth in Brazil, Thirlwall´s model and terms of trade ? Explaining the Brazilian economic growth performance during the 20th is a challenging task to academics. As shown, Brazil had already experienced faster growth and recently it is far from such belle epoque. Most explanations are based on conventional frameworks. This paper assesses the Balance-of-Payments constraint model to Brazilian economic growth in the period 1900-2005, highlighting the importance of the terms of trade. The results show, first, that the terms of trade are significant in the estimation of import demand function and change the income elasticity, especially in the first period of the sample (1900-1970), and, second, when the simplest Thirlwall?s model is controlled by terms of trade, it seems that such variable is important through import growth, which cause changes in economic performance.

Especialización, tecnología y crecimiento en el modelo Ricardiano

The paper presents a North-South trade model that discusses how changes in the technology gap affect specialization and growth in the Southern economy. The contribution of the paper is to propose a new specification for the influence of the technology gap on the pattern of specialization. It also analyzes the implications of the dynamics of the technology gap for the process of international convergence and divergence, within the context of a Ricardian trade model with a continuum of goods. Subsequently, the predictions of the model are tested through a panel analysis of the determinants of economic growth in the nineties. With this objective, new proxies recently proposed by the literature for the technological variable (the Schumpeterian dimension of the model) and for the dynamism of the pattern of specialization (the Keynesian dimension) were included in the empirical work.

Common currency and economic integration in Mercosul

Latin America has a long history of attempts to achieve regional integration, yet success has been modest. This paper contends that this is essentially due not so much to protectionist practices in the various countries, but to the lack of a common currency or, at least, of a tightly managed exchange rate band. We reviewed the optimum currency area criteria that indicate it is prudent to increase economic integration before attempting to establish exchange rates coordination. It seems fair to say that diminishing exchange rate instability could encourage trade and investment flows across Latin American economies. We also performed a very simplified exercise to understand how feasible efforts would be between policymakers in two large economies (Brazil and Argentina) to achieve exchange rate parity stability and step toward adopting a common currency.

External Debt in Developing Economies: Assessment and Policy Issues

More than one decade after the external debt restructuring (the Brady Plan), a great amount of literature has been published concerning the balance sheet factors in developing countries. The staff of international multilateral institutions joined with reputable academics in this great controversy. The external debt problem of the developing countries is back and once more reflections on its cause and on policy recommendations are analytically distinct. Our main task is to reflect on the recent external debt dynamics and assess how this debt has evolved. Our findings indicate that the susceptibility of some developing countries to default is associated with global imbalance, that is, the way they borrow.

FLUTUAÇÃO CAMBIAL E METAS INFLACIONARIAS EM ECONOMIAS EMERGENTES

Este trabalho pretende apresentar um modelo-sintese para compreensao de flutuacoes cambiais sob um regime de metas de inflacao, a partir de um modelo Mundell-Flemmig expandido. Procuramos destacar as relacoes entre a escolha de uma meta inflacionaria com o comportamento da taxa de juros e do produto, conforme esperado por uma politica monetaria otima. Nossa conclusao e a de que a estrategia de metas inflacionarias esta fortemente associada a escolha de regimes de câmbio mais flexiveis, e que deve se constituir em sucesso em estabilizar o comportamento de precos em niveis relativamente baixos, o que implicaria alguma trajetoria de crescimento do produto, na ausencia de choque de oferta, mas nao necessariamente de taxa de juros baixas e de taxa de câmbio relativamente pouco volatil.

Crescimento econômico e liquidez externa no Brasil após 1970

This paper assesses the relationship between the capital account and the Brazilian economic growth according to balance-of-payments constraint approach. The Thirlwall (1979)´s simple rule is extended to take into consideration capital account and several empirical evidence using time series analysis are shown. Conversely to the simple rule when fitted rates of balance-of-payment equilibrium economic growth average bellow the observed ones, fitted rates of growth using the rule extended to international liquidity are consistently greater than the observed ones. It is fair to conclude that, first, the Brazilian economy grows better during abundant international liquidity and, second, the economy sub utilizes such advantage growing far less than it could grow.