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Private sector credit and inflation during Brazilian stabilization plans: Models with endogenously determined structural breaks

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  • Zerbini, Maria Beatriz
  • Rocha, Fabiana

Abstract

The purpose of this paper is to investigate the relationship between credit, inflation, and stabilization plans in Brazil during 1970-1998. The structural changes suffered by credit are endogenously determined using Bai and Perron's methodology (1998). The breaks correspond to the major stabilization plans adopted by the country. A negative relationship between credit and inflation is found. Stability contributes to credit expansion without, however, guaranteeing its quality.

Suggested Citation

  • Zerbini, Maria Beatriz & Rocha, Fabiana, 2002. "Private sector credit and inflation during Brazilian stabilization plans: Models with endogenously determined structural breaks," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 22(2), November.
    • Handle: RePEc:sbe:breart:v:22:y:2002:i:2:a:2735
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