Monetary policy in Brazil in pandemic times

ABSTRACT The paper discusses the determination of inflation in Brazil, especially after the great recession of 2015-2016, to assess the adequacy of manipulating interest rates to control the rise in prices due to permanent cost pressure. The burden of using the interest rate to fight cost inflation is to create a highly conventional level of the real interest rate, which benefits the rentier class in a financialized economy. In the light of the post-Keynesian macroeconomics, a high-interest rate convention keeps the economy with a low growth rate and a low investment rate, which in the case of the Brazilian economy has resulted in a regression in the productive matrix and productivity stagnation, and both contribute to perpetuating cost pressures on prices. The empirical analysis corroborates the discussion about recent inflation having its origin in cost pressures over which the interest rate impact for its control is limited. We complement the empirical analysis by testing the response to the SELIC interest rate of the variables used to explain the fluctuation of market prices and administered prices: commodity price index, exchange rate and activity level. As expected, the impact of an increase in the interest rate appreciates the exchange rate, favouring inflation control and reducing the level of activity but has no impact on the commodity price index.

摘要：本文探讨巴西通胀的决定机制，尤其聚焦2015-2016年大衰退后的通胀态势，以评估通过调整利率管控永久性成本压力引致的物价上涨的合理性。运用利率对抗成本型通胀的核心代价，是需将实际利率维持在极高的常规水平，这将使金融化经济中的食利阶层获益。基于后凯恩斯主义宏观经济学视角，高利率的常规政策会令经济长期处于低增长、低投资状态；就巴西经济而言，这已导致其生产结构退化与生产率停滞，二者共同推升并固化了物价端的成本压力。实证分析佐证了“近期通胀源于成本压力，而利率管控此类通胀的作用有限”这一核心论断。为补充实证分析框架，本文检验了用于解释市场定价与行政管制定价波动的三类变量——大宗商品价格指数、汇率与经济活动水平——对SELIC利率的响应。正如预期，利率上调会推动本币升值，有利于通胀管控并压低经济活动水平，但对大宗商品价格指数并无显著影响。