DESENVOLVIMENTO FINANCEIRO E POTÊNCIA DE POLÍTICA MONETÁRIA: UMA ABORDAGEM CROSS-COUNTRY / FINANCIAL DEVELOPMENT AND POWER OF MONETARY POLICY: A CROSSCOUNTRY STUDY

AUTOR(ES)

NELSON CAMANHO DA COSTA NETO

DATA DE PUBLICAÇÃO

2007

RESUMO

The liberalization of capital markets of the last two decades allowed for the development of financial markets in many countries. The monetary authority is interested if these changes affect its ability to reach its objectives (maintain inflation and output at levels that foster a stable economic environment) through the policy instrument (usually the overnight interest rate). This paper investigates, through a Vector Auto-Regression (VAR) Cross-Country study containing 37 countries, the relationship between financial development and the power of monetary policy. It finds evidence that the power of the monetary policy is positively correlated with financial development, measured as the amount of private credit/GDP. For Brazil, which has recently experienced a surge in its private credit/GDP, the policy implications are straightforward: a more powerful monetary policy may enable a sharper reduction in the high Brazilian real interest rates.

ASSUNTO(S)

desenvolvimento financeiro credit monetary policy credito politica monetaria financial development

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