Brazil Hikes Interest Rate to 6. It was the fifth interest rate hike in and policymakers see another interest rate increase by the same margin at the next meeting. The Committee considers that, at the present stage of the tightening cycle, this pace is the most appropriate to guarantee inflation convergence to the target at the relevant horizon and, simultaneously, allow the Committee to obtain more information regarding the state of the economy and the persistence of shocks.
At this moment, the Copom's baseline scenario and balance of risks indicate as appropriate to advance the process of monetary tightening further into the restrictive territory. Brazil Central Bank Unveils Largest Rate Hike Since Brazil's central bank on Wednesday announced its fourth interest rate hike in and the biggest in almost two decades, raising the Selic rate by basis points to 5.
The Committee aims to prevent high current inflation from spilling over into next year and foresees another adjustment of the same magnitude in September.
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Economie internationale, n. French Politics, v. New York: Cambridge University Press, Economistas e elites dirigentes no Brasil. This article is a contribution to this second category of studies the background and career analysis of central bankers. Its findings, however, can serve to fuel the debate that drives research in the first field namely, the accountability of Central Banks.
The findings can also interest economists, since it is somewhat pointless to discuss the independence of a government institution without considering to whom autonomy must be granted. Our objectives are twofold. The second goal is to verify the existence of any patterns when comparing different BCB directorate areas - those dedicated to formulating political economy and those responsible for administrative matters - and the profile of their members.
Rio de Janeiro: Ed. European Economic Review, v. Building upon the fact that Brazilian academia is uniquely plural in terms of different types of training and theoretical affiliations in economic thought, and admitting that a deeper discussion is needed as to the definition of the strands of economic thought among us, we have included the literature on economic methodology in order to define the concept of mainstream.
Incorporating this subject in Political Science, as well as bringing into Economics an emphasis on the profile of directors of these institutions, is a form of building a multidisciplinary field and may represent progress in the literature in both fields.
Taking this into consideration, we intend to test the hypothesis that the profile of the members of directing bodies of the BCB varies significantly according to their functional responsibilities, that is, to whether they are responsible for the decision making of economic policies or for internal administrative matters,.
To be more specific, our hypothesis suggests that in the case of the directing bodies responsible for economic policy, directors tend to be recruited outside the bureaucratic cadres of the BCB, especially from the financial system, and usually have academic backgrounds in mainstream economic schools. This article is divided into four parts. The first part summarizes and discusses the Political Science literature on directing bodies of Central Banks, including research data from previous studies conducted in Brazil.
Next, we present our data concerning the professional trajectories of BCB directors. In the third part we focus on education backgrounds.
This third section, however, begins with a review of the literature in the field of Economic methodology in order to support our classification of Brazilian and foreign institutions in which BCB directors obtained their degrees in Economics.
We also used data from rankings and other empirical studies on the profiles of Economics departments and the scientific output of economists in order to support our conclusions.
Next, in our concluding section, we present the findings of this study and debate its meaning. Here we analyze the attributes of 39 BCB directors in the five governments mentioned above, of which 21 served in twelve years of PT governments and 18 in eight years of PSDB governments. We considered only the first appointment. In this sense, the five directors appointed to BCB during Itamar Franco government maintained in the first Cardoso government were taken into account.
There is also the case of four directors appointed during the second Cardoso government and stayed during the first few months of Lula government.
The study of the biographical profiles of BCB directors in Brazil is based on the curriculums available in the Senate Gazette and its bank of Official Messages. Only a few cases required us to resort to other sources, such as pieces in the press, CNPq Lattes platform [a database created by the Brazilian research agency containing the academic training and output of all researchers it funds], documents of the Parliamentary Commission of Inquiry of the Chamber of Deputies and documents elaborated by the American Economic Association with annual reports of doctorate degrees granted.
In Bankers, Bureaucrats, and Central Bank Politics, Adolph , analyzing the recruitment of Central Bank policymakers from all over the world, deals with the influence of career trajectories in the formation of individual preferences and, consequently, in the formulation of monetary policy. Hence, the constant fluctuation observed consists of periods in the government or the financial sector with transitional stages with longer or shorter time length in Central Banks.
Information in the press of this nature is rare, even in the case of presidents, who are much more public figures. The curriculums we had access to contained only activities prior to appointment with the selection and bias imprinted by the agent himself. Thus our analysis will limit itself to backgrounds, whether educational or professional.
Figure 1: Career paths of Central Bank directors and institutional contexts. The careers of directors of State agencies are one of the elements that must be analyzed in order to understand the functioning of government institutions and to predict its decisions.
Specifically, the constant circulation of directors between the State and the market could partially explain the behavior of Central Banks regarding monetary policy. Thus, according to Adolph,. The perspective of going upward, whether inside or outside the organization, whether public or private, creates an incentive to please not only direct superiors, but also anyone that might be helpful.
Education and occupational career affect the inflation performance of central bankers because they convey knowledge about the causes and effects of inflation. In addition, professional experience may generate personal loyalties to special interest groups: a profession or industry, a party, a bureaucracy, an income group etc. The authors discovered that there are different prevailing configurations in the composition of these committees. In addition, the possible impact of distinct biographic experiences on political choices, cognitive disposition and cultural differences was shown by Lebaron LEBARON, F.
However, none of these studies consider the background of actors involved in terms of affiliation to strands of economic thought. They simply analyze whether backgrounds include specific training in Economics or other fields. Two considerations lead us to believe that this sort of analysis requires improvement.
Within this division there is an additional divide between the mainstream and what we can call the heterodoxies in Economics. However, also within the mainstream there are also divergences. In this regard, this study will leave aside these internal divisions within the mainstream due to a second consideration. The conclusions of this study must be employed with caution. It is necessary to consider that Brazil is rather unique in terms of its intellectual and institutional plurality.
In several undergraduate and graduate schools, different perspectives are taught, begetting a quite different academic environment from that found in the US and, increasingly, in Europe. Thus separating economists with strictly mainstream schools training from those that were exposed - especially at the graduate level - to strands opposed to it is particularly interesting in the Brazilian case. Here, in addition to the fact that central bankers can be chosen from among economists and non-economists, the former can be selected from a broader pool of Economic theories and methodologies.
However, the presentation of data in an aggregated fashion hides a change in the profile of directors recruited in different governments after the military regime Figueiredo government marked a decisive turn in the formation of BCB cadres.
His study outlines the profiles of 13 presidents and 55 central bank directors from to , dividing the directing bodies into two categories: i monetary and exchange rate policies making; 4 4 Includes the following boards: Banking Diban , Market Capitals Dimec , External Affairs Direx , Monetary Policy Dipom and Economic Policy Dipec.
The former are in charge of the elaboration of economic policy and thus are informally linked to the Presidency, which has a special interest in the appointment of its members. The latter are involved either in supervision and regulation matters or in internal organizational issues of the Central Bank. Olivieri also analyzed the social networks responsible for selecting BCB directors , outlining some former presidents of the Republic, former presidents of BCB and former Ministers of Finance, as the greatest detainers of appointment power.
We can therefore conclude that BCB usually adopts different criteria to fill in posts in its different types of directorate posts, an information that is lost when data is approached in an aggregated form.
However, the analysis of professional trajectories the sources of recruitment does not exhaust the study of the variables involved in the process of appointment of central bankers. A more complex view of this process requires us to take into consideration the role of university education and economic ideas in shaping the perspective of decision makers concerning economic policy.
Furthermore, they maintain close ties to private enterprises, especially banks, to whom they serve as consultants. Nevertheless, Loureiro disregards any specific analysis from the field of economic methodology to distinguish educational backgrounds. In this article, we refine the criteria of classification. We discuss the type of background in economics considering the literature on economic methodology. The third section presents a deeper discussion on the economic schools of thought, educational institutions and intellectual backgrounds.
The analysis considered all 39 individuals who served at least once in BCB directing boards. Of this total, 21 were appointed by PT in 12 years of government and 18 by PSDB, including those appointed during Itamar Franco government who stayed in Cardoso government.
The first Lula government chose the highest number of central bankers in the series ten - one more than the second Cardoso term. In the case of Lula I, this was due to the change of the incumbent party in the Presidency and consequently the change in command of the Central Bank. In addition, there was an important change in the ministry of finance. Brasil entre o Passado e o Futuro. Dilma I government made the least number of appointments - only three directors. Your name Your email Friend's name Friend's email Message.
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