Investor sentiment, economic uncertainty, and monetary policy in Brazil,

Abstract

The aim of this study is to analyze how economic uncertainty and monetary policy affect investor sentiment in Brazil. Investor sentiment is an important element in the finance, economics, and accounting literature and its impact on financial markets is widely documented. However, understanding the variables that affect it remains an important challenge, and this research seeks to explore this gap within the Brazilian context. The study provides initial evidence regarding the impact of economic uncertainty and monetary policy on investor sentiment in Brazil. The findings documented here provide theoretical, managerial, and social contributions, with a possible impact on the areas of finance, economics, and accounting. Monthly data were used relating to four mechanisms of transmission of economic uncertainty and of monetary policy (interest rate, exchange rate, inflation rate, economic uncertainty index) and to the consumer confidence index as a proxy for investor sentiment (covering the period from January of 2006 to March of 2020). An autoregressive distributed lag model was estimated to capture short- and long-term relationships between the variables. The results indicate that investor sentiment is affected by economic uncertainty and by the main mechanisms of transmission of monetary policy to different extents and in the different time horizons. The evidence suggests that investors, policymakers, and monetary authorities should consider sentiment as a signal, whether for altering investment portfolios or for anticipating economic trends. It also provides support for focusing on economic and monetary policy in the National Financial Education Strategy (Estratégia Nacional de Educação Financeira - ENEF) recently adopted in Brazil

Implementación del Régimen RIMPE y su Adaptación Tributaria en el Ecuador

“…En épocas de crisis o recesión financiera se crearon métodos para elaborar políticas para mejorar la confianza y la recuperación económica. Los inversionistas deben tomar en cuenta la inseguridad económica y la política del Estado como aviso de cambios en los resultados económicos, lo que podría perjudicar a sus utilidades y además a las restricciones financieras y en el mercado de valores (Marschner & Ceretta, 2021).…”

Exogenous shock: hierarchical effect of the industrial entrepreneur confidence in the mist of the COVID-19 pandemic

“…F€ orster et al (2022), Garretsen et al (2022) and Wang et al (2023) point out that the COVID-19 pandemic constitutes an exogenous shock affecting organizations worldwide. Economic uncertainties and monetary shocks are mirrored in the market through investors' reactions to economic and monetary news, as they directly impact the level of risk exposure to which the investor will be subjected (Kartal et al, 2022;Marschner and Ceretta, 2021). The entrepreneur's expectations and confidence are seen as an interest and reference point to the decision-maker, since they are the ones who define the context of the investor's decisions and which directly reflect on the business investment (Almor, 2018;Stoker et al, 2019;Guo et al, 2023).…”

“…Economic uncertainties and monetary shocks are mirrored in the market through investors' reactions to economic and monetary news, as they directly impact the level of risk exposure to which the investor will be subjected (Kartal et al. , 2022; Marschner and Ceretta, 2021).…”