Inflation gap persistence and volatility

Authors

DOI:

https://doi.org/10.1590/1980-53575245sng

Keywords:

Monetary Policy, Trend inflation, Inflation-gap

Abstract

In this article, we estimate a trend for Brazilian inflation in order to present an alternative measure of long-term inflation and provide a complement to the traditionals core inflation measures. In addition to the economic analysis of the behavior of this estimation, a pseudo real-time predictive capability assessment is applied. Obtaining the trend also allowed us to verify the  dynamics of the persistence and volatility of the inflation gap during the current monetary regime. In the period under review, the results are correlated with the Brazilian situation, with positive contributions from the trend in the inflation prediction process. Still, they show a resistance convergence of the inflation rate to the levels pre-established by the CMN, in view of a considerable persistence of the inflation gap. The volatility of the gap, on the other hand, corroborates and identifies, at the same time, the great oscillations present in the domestic and external economic scenario.

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Author Biographies

  • Pt Pt, Universidade Federal de Juiz de Fora

    Professor

  • Pt Pt, Central Bank of Brazil

    Analista

  • Pt Pt, Universidade Federal de Santa Catarina

    Professor

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Published

23-12-2022

Issue

Vol. 52 No. 4 (2022)

Section

Articles

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Copyright (c) 2022 Sidney Martins Caetano, Nelson da Silva, Guilherme Valle Moura

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How to Cite

Pt, P., Pt, P., & Pt, P. (2022). Inflation gap persistence and volatility. Estudos Econômicos (São Paulo), 52(4), 851-877. https://doi.org/10.1590/1980-53575245sng