Convention, interest rates and monetary policy: a post-Keynesian–French-conventions-school approach*

Modenesi, André de Melo; Modenesi, Rui Lyrio; Oreiro, José Luís; Martins, Norberto Montani

doi:10.4337/ejeep.2013.01.07

Cited by 7 publications

(4 citation statements)

References 41 publications

(26 reference statements)

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“…Portanto, os agentes precisam construir expectativas sobre o futuro para decidirem a alocação de riqueza entre os ativos existentes e, devido à incerteza forte, utilizam as convenções para formarem suas expectativas (Keynes, 1936). Na literatura Pós-Keynesiana, convenções são crenças compartilhadas, associadas a uma regra coletiva de comportamento, de caráter mimético, não determinísticas e baseadas na intersubjetividade entre os agentes (Dow, 2010;Modenesi et al, 2012).…”

Section: Convenções E Políticas Públicasunclassified

As Convenções e o Novo Marco do Saneamento Básico Brasileiro

Silveira Côrtes,

Riani,

Resende

2024

BKR

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Conforme diagnóstico do governo brasileiro, a insuficiência de investimentos em saneamento no país só poderá ser suprida com a abertura desse mercado para a iniciativa privada. Na ótica Pós-Keynesiana, o investimento privado depende da confiança empresarial em uma expectativa otimista quanto ao seu retorno. Nesta perspectiva, as expectativas são formadas com base em convenções, definidas como crenças compartilhadas. Este artigo tem como objetivo analisar se a nova lei do saneamento, Lei nº 14.026/2020, ao instituir mudanças no setor poderá fazer emergir uma convenção que contribua para estimular o investimento privado em saneamento no país. Constata-se que, embora se constitua sólida base para a mudança de convenção, a nova lei do saneamento, sem o apoio de outras medidas analisadas neste artigo, não é suficiente para estimular o investimento privado a ponto de suprir a lacuna de investimento em saneamento no país.

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Section: Convenções E Políticas Públicasunclassified

As Convenções e o Novo Marco do Saneamento Básico Brasileiro

Silveira Côrtes,

Riani,

Resende

2024

BKR

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“…Author's elaboration. 3 See Carvalho (2014) on conventions; Modenesi et al (2013) on conventions and monetary policy; Fraga (2019) on the impact of conventions on investment. 4 Data from the Fiscal Policy Observatory of Fundação Getúlio Vargas (FGV).…”

Section: Debt Sustainability In Brazilmentioning

confidence: 99%

analysis of debt sustainability in Brazil

Ferreira-Filho

2023

REPP

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Resumo: Este artigo tem como objetivo discutir a sustentabilidade da dívida da economia brasileira, que está sob escrutínio desde 2013. As economias emergentes podem enfrentar instabilidade com balança de pagamentos ou aumento da inflação devido a uma possível desvalorização cambial. Assim, foram realizadas simulações prospetivas da dinâmica da dívida bruta utilizando dados disponíveis até 2023. Até 2040, sob as expectativas do mercado e certos pressupostos, a dívida bruta não parece explosiva. A Dívida Bruta do Governo Geral (DBGG) tende a aumentar no curto prazo, estabilizando-se no médio e longo prazo. Contudo, não é uma situação confortável, especialmente considerando que os níveis de DBGG estão acima dos países emergentes e dada a possibilidade de choques adversos nas variáveis mais relevantes sobre a dinâmica da dívida. A combinação de “r – g” deve melhorar para que o Brasil tenha uma trajetória de dívida mais benigna. Palavras- chave: Sustentabilidade da dívida e economia brasileira Abstract: This article aims to discuss the debt sustainability for the Brazilian economy, which has been under scrutiny since 2013. Emerging economies may face instability with balance of payments or rising inflation due to a possible currency devaluation. Thus, prospective simulations of gross debt dynamics were conducted using data available up to 2023. Until 2040, under market expectations and certain assumptions, gross debt does not seem explosive. General Government Gross Debt (GGGD) tends to rise in the short term, stabilizing in the medium and long term. However, it is not a comfortable situation, especially considering that GGGD levels are above those of emerging countries and given the possibility of adverse shocks in the most relevant variables regarding debt dynamics. The combination of “r – g” should improve for Brazil to have a more benign debt trajectory. Key-words: Debt sustainability and Brazilian economy

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“…However, short-term interest rate, administered by the central bank, should not be confused with the determination of a system anchor, towards the natural rate. This long-term interest rate is determined by the profits on capital, which, in turn, depend on the productivity and the relative abundance of the existing capital (MODENESI et al, 2013).…”

Section: Central Bank Practicesmentioning

confidence: 99%

“…Therefore, changes on internal basic rate of interest, that relocates the whole spectrum of interest rates, have the power to attract or to push investments out of the country. This process alters the demand for domestic currency, which in a flexible exchange regime leads to its valuation or devaluation against the currencies of the rest of the 25 For some Post-Keynesian authors, such as Evangelista and Sbardellati (2016), Modenesi et al (2013), Fontana and Palacio-Vera (2003) among others, this transmission mechanism is known as the "interest rate channel". 26 "(…) Meaning by this, not the market-price at which an asset of the type in question can actually be purchased in the market, but the price which would just induce a manufacturer newly to produce an additional unit of such assets, i.e.…”

Section: Post-keynesian Alternativesmentioning

confidence: 99%

The endogeneity of money supply in Brazil

Ultremare¹

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The evaluation of money endogeneity reveals the complex arrangements that form a banking structure and its ability to create money through credit. In this regard, the key features of the Post-Keynesian structuralist approach of money supply are: (i) money is mostly created in the credit market; and (ii) monetary authorities impose some limits to credit creation, however, they do not entirely determine its process. Hereof, both money demand and liquidity preference of agents (banks, firms and consumers) are the underlying forces that sustain these two attributes. The thesis investigates what has determined credit money supply in Brazil and how monetary policy has bounded this process after the adoption of the Inflation Targeting Regime in 1999. We, first, outline the intrinsic characteristics of money supply in a monetary economy of production by addressing the Post-Keynesian structuralist theory on the subject. Thereafter, we focus on the current dominant academic thinking that guides the formulation of monetary policies for numerous Central Banks by almost three decades, i.e. the New Consensus in Macroeconomics (NCM), and assess its divergences to the Post-Keynesian approach. Even though the global financial crisis of 2007-2009 has raised questions about the scientific foundation of the NCM policy rules, it has not shattered the essence of the pre-crisis theoretical elements, which still claims that the Taylor rule and the use of an inflation target should prevail since any alterations on monetary variables is at the best scenario, ephemeral. Afterwards, even though the Brazilian Central Bank has been constantly updating its models, its background lies on the ultimate ability the monetary authority has to control the monetary base. However, we find evidences, both in empirical analyses and in econometric models, that there are other variables which affect the credit supply decision of banks in Brazil: the long-run expectations of interest rates, influenced by the policy short-term interest rate by the provoked alterations on the yield curve of banks; and credit demand, which influences banks decisions to value their wealth and, in consequence, to increase or not the credit supply. Therefore, credit supply in Brazil is endogenously determinedas expected by the Post-Keynesian theoryby the liquidity preference of banks and the demand for funds, being, thus, bounded by the monetary policy. LIST OF GRAPHSGraph 1. Reserve Requirements by type

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Convention, interest rates and monetary policy: a post-Keynesian–French-conventions-school approach*

Cited by 7 publications

References 41 publications

As Convenções e o Novo Marco do Saneamento Básico Brasileiro

As Convenções e o Novo Marco do Saneamento Básico Brasileiro

analysis of debt sustainability in Brazil

The endogeneity of money supply in Brazil

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