Inflation Persistence in Brazil - A Cross Country Comparison

April 4, 2014

Preview Citation

Format: Chicago

Shaun K. Roache Inflation Persistence in Brazil - A Cross Country Comparison, (USA: International Monetary Fund, 2014) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Inflation persistence is sometimes defined as the tendency for price shocks to push the inflation rate away from its steady state—including an inflation target—for a prolonged period. Persistence is important because it affects the output costs of lowering inflation back to the target, often described as the “sacrifice ratio”. In this paper I use inflation expectations to provide a comparison of inflation persistence in Brazil with a sample of inflation targeting (IT) countries. This approach suggests that inflation persistence increased in Brazil through early 2013, in contrast to many of its IT peers, mainly due to “upward” persistence. The 2013 rate hiking cycle may have contributed to some recent decline in persistence.

Subject: Consumer price indexes, Inflation, Inflation persistence, Inflation targeting, Monetary policy, Prices

Keywords: Africa, Building inflation credibility, Consumer price indexes, Inflation, Inflation expectation, Inflation persistence, Inflation persistence, Inflation persistence in Brazil, Inflation shock, Inflation targeting, Monetary policy, Phillips curve, Rate of inflation, Sample bias, Sample period, WP

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/055
Stock No:

WPIEA2014055
ISBN:

9781475585230
ISSN:

1018-5941

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