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This paper relates to the literature on central bank (CB) transparency and inflation uncertainty. Considering that opacity is a possible source for inflation uncertainty the purpose of this paper is to test the hypothesis that increase in the dispersion of the degree of CB opacity generates higher levels of inflation uncertainty.

In a first step, the authors present a theoretical model that shows how increase in the dispersion of the degree of CB opacity creates higher levels of inflation uncertainty. In a second step, the authors test the assumption that increase in the dispersion of the degree of CB opacity generates higher levels of inflation uncertainty in the Brazilian economy.

The findings denote that CB transparency is an important tool for guiding public expectations and thus contributes to avoiding the uncertainty caused by CB preferences.

This paper extends the theoretical model presented by de Mendonça and Simão Filho (2007) by the theoretical link between the forecast error and opacity. Furthermore, because the theoretical underpinning relies on the CB guiding inflation expectations, the authors construct an uncertainty measure based on survey of forecasts where such expectations can be inferred through the variability in the forecast error.

The relevance of transparency related to public finances is considered fundamental for good economic policy management. An environment of greater fiscal transparency allows the private sector greater predictability, improving the entrepreneur’s decision-making ability. This study empirically analyzes fiscal opacity’s effect on business confidence in an emerging economy.

We use monthly data from the Brazilian economy from January 2010 to March 2023. Based on Ordinary Least Squares (OLS) and the Generalized Method of Moments (GMM) regressions, we analyze whether fiscal opacity, measured by the signal-to-noise ratio, affects business confidence. Moreover, to evaluate the duration of a shock transmitted by the fiscal opacity on business confidence, we consider an impulse-response function generated by a Vector Auto-Regressive (VAR).

We found that fiscal opacity resulting from the lack of information to anticipate the budgetary result of the public sector deteriorates business confidence.

We present robust empirical evidence that allows us to assume that using a strategy to reduce fiscal opacity through mechanisms that provide reliable economic data and fiscal forecasts is essential for fiscal policy to affect business confidence positively. Reducing fiscal opacity provides greater clarity regarding the budget outcome, reduces economic uncertainty and improves the fiscal policy expectation channel.

This paper is the first to analyze how the lack of information for market agents to anticipate the government’s budget execution accurately (fiscal opacity) affects business confidence.

This paper aims to contribute to the analysis concerning how inflation forecasts from different economic agents (professional forecasters and consumers) lead to varying levels of central bank credibility and how it affects the monetary policy interest rate and its expectations.

Based on the Brazilian economy data from June 2007 to May 2022, the authors provide evidence that is useful for search mechanisms that improve the conduct of monetary policy through the management of inflation expectations. The authors perform several ordinary least squares and generalized method of moments regressions inspired by the Taylor rule principle. In brief, the benchmark model considers that the monetary policy interest rate and its expectations respond to departures of inflation expectations to the target (a proxy for central bank credibility) and the level of economic activity.

The main result of the analysis is that inflation expectations from professional forecasters and consumers imply different perceptions of central bank credibility that affect the monetary policy interest rate and expectations for horizons until one year ahead.

The novelty that the authors bring from the analysis is that the authors calculate central bank credibility by taking into account the “public beliefs” of different economic agents. Furthermore, the authors analyze the effect of central bank credibility from professional forecasters and consumers on the monetary policy interest rate and its expectations.

The purpose of this paper is to discuss more efficient mechanisms of regulation in the financial system.

The authors developed a theoretical two-period model of financial flows (FFs) that considers households, banks, and a social planner.

It is important to highlight that different from other studies that do not distinguish between financial crisis and financial instability, the authors assume financial instability does not mean crisis, but represents a deviation in the behavior of the aggregate financial intermediation and in the financial operations of each bank from the equilibrium.

The practical implication of the model is the proposition of an efficient policy for financial stability based on forward-looking financial regulations.

An important result is that bank failures occur when banks do not maintain sufficient resources to support the liquidity constraint from the interbank market. Another result is that the central bank reacts, via exchange of reserves with the market, to financial instability. This behavior on the part of the central bank is inefficient because the banks will assume that in the case of failure they will be “saved;” thus it creates an adverse incentive (moral hazard) that can amplify the risk over the entire financial system.

The originality of the model is the proposition of an efficient policy for financial stability based on a forward-looking financial regulation. In this strategy the regulator acts in advance (ex ante) to minimize the mismatch of FFs in relation to the flow balance. This manner of acting is a counterpoint to the financial regulation based on capital requirement.

The purpose of this paper is to contribute to the empirical literature that analyzes the effect of the core infrastructure (telecommunication, electricity and transportation) and indirect taxation on economic growth.

The authors present empirical evidence through panel data analysis based on a comprehensive sample of countries (96) over a long period of time (1976 to 2014).

The findings confirm the assumption that the core of infrastructure is essential to promote economic growth. Furthermore, indirect taxation is not a tool capable of stimulating growth. In particular, new sectors of the core of infrastructure, such as the internet and mobile telephony, are capable of expanding the effect of infrastructure on growth.

Based on a sample of 74 countries, we include new infrastructure sectors into the analysis (transportation, fixed telephony, mobile telephony and internet), and verify changes from the 1990s.

The purpose of this paper is to analyze if the unconventional monetary policy, known as quantitative easing (QE) practiced by central banks in the USA, the UK, and Japan was effective to increase the market share after subprime crisis.

In order to analyze the effect of the QE on the stock markets of the USA, the UK, and Japan, the authors use an ARDL model to find the long-run relationship among the variables.

The findings denote that the QE implemented by the central banks in the USA, Japan, and the UK had a positive impact on their stock markets.

The results of the paper give some new insights about the conduction of monetary policy when the interest rates are close to zero.

This paper provides empirical evidence regarding the effect of fiscal management performance on local economic development in an emerging economy.

The authors performed a panel data analysis based on data from the 5,568 Brazilian municipalities from 2006 to 2015. To consider if the difference in the characteristics of the municipalities can affect the results, the authors used different samples: a total of municipalities, metropolitan, nonmetropolitan, urban and rural municipalities. Furthermore, to check the difference of the effect on economic development associated with good and bad fiscal management in the municipalities, the authors considered a sample of the 500 best and the 500 worst fiscal management performances.

The findings indicate that an improvement in fiscal management is an important strategy to stimulate local economic development. In particular, the relevance of fiscal management performance to stimulate economic development is more significant in metropolitan and urban municipalities.

This analysis is the first to use data that take into account all the Brazilian municipalities covering information of the 21st century. Moreover, different from the previous literature, which considered efficiency from the data envelopment analysis (DEA), the authors used a fiscal management index that allowed one to consider a time-varying fiscal performance of the Brazilian municipalities.

The purpose of this paper is to make an empirical analysis concerning time-inconsistency problem (TIP) based on a sample of 12 countries for the period from 1993 to 2011.

The existence of TIP only makes sense if there is a trade-off between inflation and unemployment and when there is a causal relationship indicating that with more inflation, unemployment is reduced (as suggested by the Phillips curve). Hence, TIP is observed by testing the existence of cointegration between inflation rate and unemployment rate series and analyzing the sign of the estimated coefficient of the cointegration vector.

The findings indicate that the large majority of countries in the sample have policies that are consistent with long-term goals. Furthermore, it is possible to conjecture that the traditional argument that developing countries have weak institutions and thus present a fertile ground for TIP or that the adoption of inflation targeting (IT) can avoid TIP is not necessarily true.

This study sheds light on four important issues. First, has the change in the mindset of the monetary policy management from the 1990s eliminated TIP? Second, is TIP a sickness only for developing countries? Third, is IT associated with TIP? Fourth, has the TIP increased around the world due to the subprime crisis? In short, this paper is an advance on the empirical literature on TIP and it is a very important overview for observing the present day conduct of the monetary policy through the international experience.

This article aims to analyze if the adoption of inflation targeting in Brazil contributed to an improvement in the conduction of monetary policy capable of increasing credibility and reducing inflation without an increase in the sacrifice rate.

Considering the Brazilian experience, this article estimates, through GMM and VAR methods, the offsetting effects of a monetary policy change on the output‐inflation and unemployment‐inflation trade‐offs.

The findings denote that the disinflationary process implemented in Brazil, after the adoption of inflation targeting, is not associated with the emergence of the above‐mentioned trade‐offs. Furthermore, the development of credibility in the conduction of monetary policy is an important element responsible for the achievement of this result.

Development of credibility is an important strategy for improving the conduction of the monetary policy.

The results of the paper give some new insights about the conduction of monetary policy for developing countries, which have adopted inflation targeting.

This paper aims to study a monetary policy problem, where concerns with price stability and with the impact of interest rates on public debt are simultaneously addressed.

The problem is analytically approached under a new Keynesian monetary policy framework to which a budget constraint is added and, subsequently, the model's implications are empirically illustrated by characterizing Brazilian policies.

The findings denote the existence of a trade‐off between inflation target and public debt stability. Therefore the determination of an inflation target cannot neglect this trade‐off. Furthermore, the empirical analysis from the Brazilian case shows that the Central Bank of Brazil takes into consideration public debt when determining the interest rate.

The determination of the interest rate in an inflation targeting regime must consider the public debt stability.

This paper makes a contribution on the theme of consistency between monetary policy and fiscal equilibrium.