Felipe Camargo
@fcamargo.bsky.social
Int'l economics & applied mathematics
The 1st scenario (red) is a benchmark situation where the economy runs its appropriate due course without additional government intervention.
In our baseline (black), the Selic rate parks at 9.5% until 2026 before the BCB adjusts it down to 8% in a couple of years' lag.
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In our baseline (black), the Selic rate parks at 9.5% until 2026 before the BCB adjusts it down to 8% in a couple of years' lag.
n/n
October 31, 2023 at 1:45 PM
The 1st scenario (red) is a benchmark situation where the economy runs its appropriate due course without additional government intervention.
In our baseline (black), the Selic rate parks at 9.5% until 2026 before the BCB adjusts it down to 8% in a couple of years' lag.
n/n
In our baseline (black), the Selic rate parks at 9.5% until 2026 before the BCB adjusts it down to 8% in a couple of years' lag.
n/n
In the figure below I've layed out two scenarios.
The red line is a "shock free" model result, considering Q1 2024 starting conditions and my calibrated steady-state targets.
The black line considers the expansionary fiscal policy and inflation convergence skepticism shocks.
The red line is a "shock free" model result, considering Q1 2024 starting conditions and my calibrated steady-state targets.
The black line considers the expansionary fiscal policy and inflation convergence skepticism shocks.
October 31, 2023 at 1:45 PM
In the figure below I've layed out two scenarios.
The red line is a "shock free" model result, considering Q1 2024 starting conditions and my calibrated steady-state targets.
The black line considers the expansionary fiscal policy and inflation convergence skepticism shocks.
The red line is a "shock free" model result, considering Q1 2024 starting conditions and my calibrated steady-state targets.
The black line considers the expansionary fiscal policy and inflation convergence skepticism shocks.
3) Because of market's scepticism about the actual 3% target centre. Since Lula voiced his will to "relax" the objective for being too low, forecasters were confused if it will be calibrated up in upcoming Monetary Council meetings. The Focus survey sees it at 3.5% for 2026.
4/n
4/n
October 31, 2023 at 1:45 PM
3) Because of market's scepticism about the actual 3% target centre. Since Lula voiced his will to "relax" the objective for being too low, forecasters were confused if it will be calibrated up in upcoming Monetary Council meetings. The Focus survey sees it at 3.5% for 2026.
4/n
4/n
2) The fiscal stance will remain less contractionary than it should be. Specialists are right to point that this gov't is unlikely to achieve a balanced primary fiscal result next year. Demand will be too strong for inflation to converge to target.
3/n
3/n
October 31, 2023 at 1:44 PM
2) The fiscal stance will remain less contractionary than it should be. Specialists are right to point that this gov't is unlikely to achieve a balanced primary fiscal result next year. Demand will be too strong for inflation to converge to target.
3/n
3/n
1) Because real wage growth hovers around 4 to 5%, way above the expected productivity gain of about 2% for this year. This will keep services inflation high for longer, as we all know how particularly sticky nominal salaries tend to be in this economy.
2/n
2/n
October 31, 2023 at 1:44 PM
1) Because real wage growth hovers around 4 to 5%, way above the expected productivity gain of about 2% for this year. This will keep services inflation high for longer, as we all know how particularly sticky nominal salaries tend to be in this economy.
2/n
2/n