The Market of Foreign Exchange Hedge in Brazil: Reactions of Financial Institutions to Interventions of the Central Bank

Between 1999 and 2002, Brazil's Central Bank sold expressive amounts of dollar indexed debt and foreign exchange swaps. This paper shows that in periods of high volatility of the exchange rate, first semester of 1999 and second semester of 2002, the Central Bank of Brazil increased the foreign exchange hedge, but the financial institutions used this to reduce their foreign exchange exposure. In contrast, increases in foreign hedge during periods of low volatility of the exchange rate were transferred to the productive sector.foreign exchange swaps, central bank interventions, foreign exchange risk

Is Inflation Persistence Over?

We analyze inflation persistence in several industrial and emerging countries in the recent past by estimating reduced-form models of inflation dynamics. We select a very representative group of 23 industrial and 17 emerging economies. Our sample period is comprised of quarterly data and starts in the first quarter of 1995. Our results show that inflation persistence is low and stable for all countries in our sample. It seems to be lower in industrial relative to emerging countries. Finally, even countries that have had “hyperinflation” experience in the recent past showed low levels of inflation persistence, albeit apparently higher than the other countries in our sample.

An Empirical Analysis of the External Finance Premium of Public Non-Financial Corporations in Brazil

Our objective in this paper is to analyze empirically the relationship between the external finance premium of non-financial corporations in Brazil with their default probability and with their demand for inventories. As for the former relation, we find that corporations that have greater external finance premium have greater probability of default. As for the latter, we find that the external finance premium is positive and statistically significantly correlated. The results confirm previous results of the literature that indicate that the balance sheet channel of monetary policy is relevant in Brazil.

Phase transition in a sexual age-structured model of learning foreign languages

The understanding of language competition helps us to predict extinction and survival of languages spoken by minorities. A simple agent-based model of a sexual population, based on the Penna model, is built in order to find out under which circumstances one language dominates other ones. This model considers that only young people learn foreign languages. The simulations show a first order phase transition where the ratio between the number of speakers of different languages is the order parameter and the mutation rate is the control one.Comment: preliminary version, to be submitted to Int. J. Mod. Phys.