Resumo

MODENESI, André de Melo. Conservatism and rigidity in monetary policy. Rev. Econ. Polit. [online]. 2011, vol.31, n.3, pp. 415-434. ISSN 0101-3157.  http://dx.doi.org/10.1590/S0101-31572011000300006.

This paper aims at evaluating the conduction of monetary policy after the adoption of inflation targeting. Formation of Selic rate is modeled by estimating a reaction function of the BCB. Results show an excessive degree of interest rate smoothing and a high level of equilibrium interest rate. This evidence supports the belief that Selic rate's formation is ruled by a conservative behavior. The conservative conduction of monetary policy is related to two distinct features of BCB's reaction function: i) the great weight of autoregressive components; and, chiefly, ii) a very high level of the equilibrium interest rate. The main conclusion is that, all remaining unchanged, the interest rate would hardly be reduced in a satisfactory way. Massive and chronic deflation would be needed if Selic were to reach a reasonable level, closer to that of rates in the rest of the world. This evidences the need for a debate on the adequacy of current stabilization strategy.

Palavras-chave : Taylor rule; Selic; conservatism.