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This work investigates the repercussions of real devaluations in the exchange rate on the trade balance for Brazil, when considering major economic categories, i.e., capital goods, durable consumer goods, semi-durable and non-durable consumer goods, intermediate goods, and fuels and lubricants. To this end, monthly data are used for the period January 2000 and July 2019, and vector error correction (VEC) models. The results suggest that, in the long run, real devaluations in the exchange rate have positive and elastic impacts on the trade balance in all sectors, except for fuels and lubricants. Only the durable consumer goods and fuels and lubricants sectors do not show the occurrence of the J curve. Domestic income has a negative impact on the trade balance in most models analyzed, while foreign income has a positive impact on all sectors, except for fuels and lubricants.

This work investigates the adequacy of core inflation measures as indicators of forward-looking expectations in the hybrid new Keynesian Phillips curve (HNKPC) for the Brazilian economy. For that purpose, we use monthly data between January 2002 and August 2015 and the heteroscedasticity and autocorrelation consistent generalized method of moments (HAC-GMM). The results indicate that the HNKPC is a robust mechanism to model Brazilian inflation dynamics in the period analyzed; that the recent increase in the degree of indexation of the Brazilian economy seems to have contributed to the formation of a stronger inertial component of inflation; and also that the core inflation measures appear to be potential indicators to model forward-looking expectations in the HNKPC in Brazil. Furthermore, the inflation forecasts extracted from these models are statistically similar to those generated by models that use market prognoses from the Focus survey published by the Central Bank of Brazil. Therefore, the core inflation measures appear to have adequately anchored the inflation expectations in Brazil in the period analyzed.

This paper aims to analyze if there is a relationship between economic growth and the volatility of that growth in the Brazilian economy, and, if it exists, to infer if that relationship is positive or negative, since the literature shows evidence for both cases. For that purpose, the econometric strategy used is that of a Generalized Autoregressive Conditional Heteroskedasticity in Mean (GARCH-M) model, using economic growth data compiled by the Central Bank of Brazil, for the period of 1995-2018. The results corroborate the findings of the empirical literature, suggesting a negative relationship between economic growth and its volatility; that is, the hypothesis of the irreversibility of investments prevails. Therefore, the tradeoff between short-term stability and long-term growth for the Brazilian economy in the analyzed period does not seem to occur.