IDEAS home Printed from https://ideas.repec.org/a/anp/econom/v14y2013i3_4233_250.html
   My bibliography  Save this article

Public debt in Brazil: Sustentability and its implications

Author

Listed:
  • Octavio Augusto Fontes Tourinho

    (Faculdade de Ciências Econômicas/UERJ, Brazil)

  • Guilherme Macedo Reis Mercês

    (Gerência de Economia e Estatística/FIRJAN, Brazil)

  • Jonathas Goulart Costa

    (Gerência de Economia e Estatística/FIRJAN, Brazil)

Abstract

This paper tests sustainability of Brazilian public debt in the period 1991 to 2009, and analyzes implications of requiring that the Brazilian fiscal policy be primarily committed to the sustainability of the public debt. The retrospective analysis utilizes a set of unit root tests and avoids some of the criticism leveled at previous studies by using data which has not previously been used for this purpose, and concludes that the public debt was sustainable in the period we consider. The prospective analysis is based on the DSGE model proposed by Jodi Galí et al. (2007) calibrated for Brazil, using the conclusions of the retrospective analysis for the fiscal parameters. The scenarios produced with the help of the model show that maintaining the sustainability of the public debt is consistent with the monetary policy of inflation targeting. We also conclude that it is possible to reduce interest rates to levels below those prevalent at the end of 2010 simultaneously maintaining the stability of the trajectory of the public debt.

Suggested Citation

  • Octavio Augusto Fontes Tourinho & Guilherme Macedo Reis Mercês & Jonathas Goulart Costa, 2013. "Public debt in Brazil: Sustentability and its implications," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 14(3–4), pages 233-250.
    • Handle: RePEc:anp:econom:v:14:y:2013:i:3_4:233_250
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1517758013000167/pdfft?md5=a3f8c4d7a16eeb81944b13172ff00ecd&pid=1-s2.0-S1517758013000167-main.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Public Debt; Public Deficit; Interest rate;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anp:econom:v:14:y:2013:i:3_4:233_250. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rodrigo Zadra Armond (email available below). General contact details of provider: https://edirc.repec.org/data/anpecea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.