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Is communication clarity from fiscal authority useful? Evidence from an emerging economy

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  • de Mendonça, Helder Ferreira
  • Nicolay, Rodolfo Tomás da Fonseca

Abstract

This study relates to the literature on the communication and clarity of the policymakers. The novelty concerns the investigation of the effect of the communication and clarity of the fiscal authority on market expectations on public debt. The article addresses empirical evidence, based on the Brazilian experience, regarding the idea that communication is essential for the coordination between the policymaker and the market participants in order to lead expectations. The findings suggest that the communications from the Brazilian National Treasury concerning fiscal policy represent an important tool to improve the effects of the management of the public debt on market expectations regarding public debt.

Suggested Citation

  • de Mendonça, Helder Ferreira & Nicolay, Rodolfo Tomás da Fonseca, 2017. "Is communication clarity from fiscal authority useful? Evidence from an emerging economy," Journal of Policy Modeling, Elsevier, vol. 39(1), pages 35-51.
    • Handle: RePEc:eee:jpolmo:v:39:y:2017:i:1:p:35-51
    DOI: 10.1016/j.jpolmod.2016.10.004
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    Cited by:

    1. Montes, Gabriel Caldas & Nicolay, Rodolfo Tomás da Fonseca & Acar, Tatiana, 2019. "Do fiscal communication and clarity of fiscal announcements affect public debt uncertainty? Evidence from Brazil," Journal of Economics and Business, Elsevier, vol. 103(C), pages 38-60.
    2. Gabriel Caldas Montes & Paulo henrique Luna, 2021. "Effects of discretionary fiscal policy and fiscal communication on fiscal credibility: Empirical evidence from Brazil," Economics Bulletin, AccessEcon, vol. 41(3), pages 1486-1500.
    3. Gabriel Caldas Montes & Victor Maia, 2023. "The reaction of disagreements in inflation expectations to fiscal sentiment obtained from information in official communiqués," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 828-859, October.
    4. Haryo Kuncoro & Gatot Nazir Ahmad & Dianta Sebayang, 2021. "A textual analysis of central bank communication the case of Indonesia," Economics Bulletin, AccessEcon, vol. 41(3), pages 2158-2172.
    5. Montes, Gabriel Caldas & Nicolay, Rodolfo & Pereira, Flavio, 2022. "Does fiscal sentiment matter for sovereign risk?," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 18-30.
    6. Juan Camilo Galvis-Ciro & Juan Camilo Anzoátegui-Zapata & Cristina Isabel Ramos-Barroso, 2022. "The Effect of Communication and Credibility on Fiscal Disagreement: Empirical Evidence from Colombia," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 18(3), pages 215-238, November.

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    More about this item

    Keywords

    Communication; Clarity; Expectations; Public debt;
    All these keywords.

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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