The Money Supply: The Evidence from the Brazilian Economy
JOURNAL ARTICLE
Cite JOURNAL ARTICLE
Style
Format
The Money Supply: The Evidence from the Brazilian Economy
Credit and Capital Markets – Kredit und Kapital, Vol. 7 (1974), Iss. 3 : pp. 364–378
Additional Information
Article Details
Author Details
Antonio M. Silveira, Rio de Janeiro, Brazil
References
-
1. Alchian, Armen A. and Kessel, Reuben A.: “Effects of Inflation.” Journal of Political Economy (December 1962), pp. 521-37.
Google Scholar -
2. Baer, Werner: Industrialization and Economic Development in Brazil. Homewood, Illinois: Irwin, 1965.
Google Scholar -
3. Brunner, Karl and Meltzer, Allan H.: “Some Further Investigations of Demand and Supply for Money.” Journal of Finance (May 1964), pp. 240 - 83.
Google Scholar -
4. Bulhöes, Octävio G.: “Financial Recuperation for Economic Expansion.” In The Economy of Brazil, edited by H.E. Ellis. Los Angeles: Univ. of California Press, 1969.
Google Scholar -
5. Christ, Carl F.: Econometric Models and Methods, New York: John Wiley & Sons, 1966.
Google Scholar -
6. Ellis, Howard S.: “Corrective Inflation in Brazil, 1964 - 1966.” In The Economy of Brazil, edited by H.E. Ellis. Los Angeles: Univ. of California Press, 1969.
Google Scholar -
7. Friedman, Milton: “Ihe Demand for Money: Some Theoretical and Empirical Results.” Journal of Political Economy (August 1959), pp. 327 - 51. Reprinted in Monetary Theory and Policy, edited by Richard S. Thorn. New York: Random, 1966.
Google Scholar -
8. Friedman, Milton: “Controls on Interest Rates Paid by Banks.” Journal of Money, Credit and Banking (February 1970), pp. 15 - 32.
Google Scholar -
9. Furtado, Celso: The Economic Growth of Brazil. California: Univ. of California Press, 1968.
Google Scholar -
10. Gerschenkron, Alexandre: “History of Economic Doctriness and Economic History.” “American Economic Review (May 1969), pp. 1-17.
Google Scholar -
11. Kafka, Alexandre: “The Brazilian Stabilization Program, 1964 - 66.” Journal of Political Economy (August 1967), pp. 596 - 631.
Google Scholar -
12. Mayer, Thomas: Monetary Policy in the United States. New York: Random, 1968.
Google Scholar -
13. Meltzer, Allan H.: “The Behavior of the French Money Supply: 1938 - 1954.” Journal of Political Economy (June 1959), pp. 275 - 296.
Google Scholar -
14. Meltzer, Allan H.: “Controlling Money.” Review-Federal Reserve Bank of St. Louis (May 1969), pp. 16 - 24.
Google Scholar -
15. Silveira, Antonio M.: “Interest Rate and Inflation: T'he Evidence From pp. 794- 895.
Google Scholar -
16. Silveira Antonio M.: ‘Ihe Demand for Money: The The Brazilian Economy.” Journal of Money, Credit and Banking (Aug. 1973), Evidence from the Brazilian Economy.” Journal of Money, Credit and Banking (Feb. 1973), pp. 113 - 40.
Google Scholar
Abstract
The Money Supply: The Evidence from the Brazilian Economy
The study analyses the money supply process in the Brazilian economy from 1948 to 1967. During this period the rate of increase in prices averaged thirty-one per cent per year and the money supply rose at an average annual rate of thirty-six per cent. A review of the institutional setting indicates that the monetary authorities were submissive to the Presidency of the country duting these two decades. The technical feasibility for controlling the stock of money is considered. Ninety-six per cent of the variability of the stock is explained by the monetary base and the expansion ratio is estimated at 2.35. The monetary authorities had the technical ability to control the discount mechanism and the reserve requirement changes. We conclude that, “fine tuning” apart, the authorities had the means to control the money stock. Discretionary control of the base is brought forward for consideration. The base is explained in terms of the budget, the changes in international reserves and the set of goals chosen by the monetary authorities. "The monetary authorities offset part of the effect of the deficits and the changes in reserves. Price stability and variations-in-output-growth avoidance seem to have significant effect in the base. The data show the independence of factors affecting the money demand and supply functions. The exogeneity of the base remains and the monetary authorities ability and discretion to control it is verifiable even in this extreme Brazilian case.