A taxa de juros como instrumento de política pública: análise de sua consistência para a estabilidade de preços no Brasil (1999-2019)

Abstract

The present work aims to analyze the consistency in the use of the short-term interest rate in Brazil, as one among other public policy instruments directed at stabilizing the general price level. The interest rate adjustment by the Central Bank of Brazil is a government tool classically used to fight inflation, given its potential to induce a contraction in the population's consumption, resulting in a fall in prices. However, the literature on government instruments highlights that public policies are not always compatible with their objectives. This is especially reinforced by Tinbergen, who popularized the concept of inconsistency to characterize this situation. In turn, the theorist Hood also contributed to the literature, warning that not only public policy influences social behavior, but also the reverse, as the decisions taken by the authorities require some information about the current situation in society. Based on this, the present manuscript proposes to empirically ascertain whether the use of the interest rate by the Central Bank of Brazil is actually associated with a lower inflation rate between the years 1999 and 2019. Based on a theoretical synthesis between Tinbergen and Hood, this hypothesis is tested using simple Vector Autoregression models, whose role is to estimate the interdependence relationship between inflationary behavior and the interest rate instrument. Finally, the paper concludes that there is not enough evidence in favor of the research hypothesis. That is, this Central Bank tool is not consistent with its purpose of stabilizing the general price level.