Business-cycle anatomy in Brazil and the U.S.: price rigidity or animal spirits?
DOI:
https://doi.org/10.1590/1980-53575637vtmKeywords:
Business Cycles, Macroeconomics, Time series, Price rigidity, Animal spiritsAbstract
We apply the econometric methodology of business-cycle anatomy developed by Angeletos, Collard, and Dellas (2020) to Brazil over the period 1999-2025, and to the United States over a longer sample spanning 1955-2025. Our main finding is that, as in the U.S., there exists in Brazil a main shock that governs business-cycle dynamics. This shock generates similar comovement across real activity series and is only weakly related to inflation. In the case of Brazil, the movements associated with this shock also resemble fluctuations in commodity prices. The evidence found in the extended U.S. sample favors theories in which the existence of real effects of demand shocks does not depend on price rigidity, but rather on mechanisms based on Keynesian concepts such as confidence and animal spirits. However, the role of commodity prices in the dynamics of the Brazilian business cycle still requires further clarification.
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Atualizado em 14/08/2025