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Is the public sector of your country a diffusion borrower? Empirical evidence from Brazil

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  • Leno S. Rocha
  • Frederico S. A. Rocha
  • Th'arsis T. P. Souza

Abstract

We propose a diffusion process to describe the global dynamic evolution of credit operations at a national level given observed operations at a subnational level in a sovereign country. Empirical analysis with a unique dataset from Brazilian federate constituents supports the conclusions. Despite the heterogeneity observed in credit operations at a subnational level, the aggregated dynamics at a national level were accurately described with the proposed model. Results may guide management of public finances, particularly debt manager authorities in charge of reaching surplus targets.

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  • Leno S. Rocha & Frederico S. A. Rocha & Th'arsis T. P. Souza, 2016. "Is the public sector of your country a diffusion borrower? Empirical evidence from Brazil," Papers 1604.07782, arXiv.org.
    • Handle: RePEc:arx:papers:1604.07782
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    References listed on IDEAS

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