Universidade de São Paulo. Faculdade de Economia, Administração e Contabilidade
Abstract
The paper develops an exchange rate regime choice problem in a general asset-pricingset-up. The government has been considered the main optimising agent in the modelwhereby regime switches may occur because the government can exercise discretion inexchange rate management. Empirical estimates for the case of Brazil suggest that regimeswitches are determined by the behaviour of wages and inflation. Overall, the resultssuggest that price fundamentals have a more significant impact on the exchange rate inthe short run. It is not until the long run that domestic expenditure variables play a part inexchange rate determination.O artigo apresenta um problema de escolha do regime de taxa de câmbio numa estrutura geral de precificação de título
