Financial and Business Cycles in Brazil


Ivo Krznar ; Troy D Matheson

Publication Date:

January 24, 2017

Electronic Access:

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This paper explores the nexus between the financial cycle and business cycle in Brazil. Cycles are estimated using a variety of commonly-used statistical methods and with a small, semistructural model of the Brazilian economy. An advantage of using the model-based approach is that financial and business cycles can be jointly estimated, allowing information from all key economic relationships to be used in a consistent way. The results show that Brazil is now in the downturn phase of the financial cycle. Moreover, the results underscore the importance of macro-financial linkages and highlight risks to the recovery going forward.


Working Paper No. 2017/012



Publication Date:

January 24, 2017



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