Monetary policy and prices in Brazil: evidence by income ranges
DOI:
https://doi.org/10.11606/1980-5330/ea203655Palabras clave:
monetary policy, income range, inflationResumen
We investigate the asymmetry effects of a monetary policy shock on prices by income level in Brazil. Using data from January 2010 to February 2020 and a sign-restricted BVAR model (controlling for the price puzzle), we find evidence that monetary policy could be socially desirable to reduce inequalities in a short period, mainly within the recessive cycles. Conclusively, an active Central Bank (sometimes named Hawkish) could contribute, at least partially, to reduce the loss of lower-income household purchasing power before wage adjustments.
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