Measuring the impact of financial flows on macroeconomic variables: the case of Brazil after the 2008 crisis

The effects of changes in foreign portfolio investment flows on Brazilian GDP and investment during the financial crisis of 2008 are evaluated through impulse-response functions, parsimonious models, and out of sample forecasts. Impulse-response functions results show a positive relation between fixed income flows and GDP and investment, but this relation is not as strong between the real variables and equity flows, although these flows anticipate GDP and investment behavior. Expectations seem to have an important role in explaining GDP and investment, which also have an influence on flows. The reduced vulnerability of the Brazilian economy consequently lessened the effect of the crisis when compared with previous crisis episodes.foreign portfolio investment, growth, investment, crisis, Brazil

A Panel Analysis of Foreign Portfolio Investment in Latin America from 2005 to 2014

O artigo analisa os fluxos de investimento externo em carteira para a América Latina no período 2005-2014. Fatores globais (push) e domésticos (pull) são utilizados como variáveis explicativas. São estimados modelos em painel para 12 países. Os resultados mostram que entre as variáveis globais o índice S&P500 e a taxa de juros dos Fed Funds são estatisticamente significantes para explicar os fluxos de investimento externo em carteira para os países latinoamericanos. A participação do investimento no PIB e o índice MSCI do país de destino também são estatisticamente significantes. As expectativas parecem desempenhar um papel relevante para explicar os fluxos de investimento externo em carteira, dado que as variáveis mais importantes na explicação dos fluxos são influenciadas pelo comportamento futuro da economia

Travel hysteresis in the US current account after the mid-1980s

Following the real appreciation of the US dollar in the first half of the 1980s, travel expenditures in the current account soared. Employing standard regression techniques as well as Markov-switching regime analysis we show that such expenditures did not return to their pre-appreciation levels thereafter. The permanent increase suggests the presence of travel hysteresis in the US current account after the mid-1980s.

Travel Hysteresis in the US Current Account After the Mid-1980s

Following the real appreciation of the US dollar in the first half of the 1980s, travel expenditures in the current account soared. Employing standard regression techniques as well as Markov-switching regime analysis we show that such expenditures did not return to their pre- appreciation levels thereafter. The permanent increase suggests the presence of travel hysteresis in the US current account after the mid- 1980s.

Optimal control theory for inflation targeting

We make a case for the usefulness of an optimal control approach for the central banks' choice of interest rates in inflation target regimes. We illustrate it with data from selected developed and emerging countries with longest experience of inflation targeting.

Inflation targeting and optimal control theory

We make a case for the usefulness of an optimal control approach for the central banks’ choice of interest rates in inflation target regimes. We illustrate with data from selected developed and emerging countries with longest experience of inflation targeting.inflation targeting; optimal control theory; Taylor rule; monetary policy

Informational inefficiency of the Brazilian stockmarket

Employing both cointegration analysis and a variety of Granger causality tests, we examine whether the Brazilian stockmarket is efficient in processing new information about public macroeconomic data (semi-strong efficiency). We find the stockmarket to be inefficient, which is in line with most results for other emerging markets.stockmarket semi-strong informational efficiency; cointegration; Granger causality; macroeconomic variables; Brazilian economy

Stock returns and foreign investment in Brazil

We examine the relationship between stock returns and foreign investment in Brazil, and find that the inflows of foreign investment boosted the returns from 1995 to 2005. There was a strong contemporaneous correlation, although not Granger-causality. Foreign investment along with the exchange rate, the influence of the world stock markets, and country risk can explain 73 percent of the changes that occurred in the stock returns over the period. We also find that positive feedback trading played a role, and that the market promptly assimilated new information.stock returns; foreign investment; Brazilian economy