{
  "title": "Fiscal Sustainability and Monetary Versus Fiscal Dominance: Evidence From Brazil, 1991-2000",
  "publication": "IMF Working Papers, January 1, 2002",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-monetary-versus-fiscal-dominance-evidence-from-brazil-1991-2000-15565",
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  "summary": "Under a monetary dominant (MD) regime, the primary surplus adjusts to limit debt growth, permitting monetary policy to be conducted independently of fiscal financing requirements. In Brazil, some evidence favors an MD regime for 1995–97, but not for the decade of the 1990s as a whole.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Under a monetary dominant (MD) regime, the primary surplus adjusts to limit debt growth, permitting monetary policy to be conducted independently of fiscal financing requirements.\n- Some evidence favors an MD regime for 1995–97, but not for the decade of the 1990s as a whole.\n- Fiscal adjustments of 1999 yielded a primary surplus of about 3 percent of GDP, consistent with solvency.\n- A credible MD regime would require further adjustments of the primary surplus if debt increases, growth falls, or interest rates rise."
    },
    {
      "heading": "Evidence and analysis themes",
      "content": "- Evaluation focuses on Brazil during 1991-2000, with particular attention to 1995–97 and fiscal adjustments in 1999.\n- The analysis links primary surplus behavior to debt dynamics and the independence of monetary policy.\n- Consideration of scenarios where debt increases, growth falls, or interest rates rise as triggers necessitating additional primary surplus adjustments."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Maintain or strengthen primary surplus adjustments to limit debt growth to sustain solvency.\n- Recognize that temporary fiscal adjustments (such as 1999’s) may be insufficient: further consolidation could be required under adverse developments (higher debt, lower growth, higher interest rates).\n- For monetary policy to operate independently (MD regime), fiscal policy must credibly commit to surpluses that stabilize or reduce public debt given prevailing growth and interest-rate conditions."
    },
    {
      "heading": "Key statistics and identifiers",
      "content": "- Period analyzed: 1991-2000\n- Subperiod with favorable MD evidence: 1995–97\n- Primary surplus after 1999 adjustments: about 3 percent of GDP\n- Pages: 30\n- Series: Working Paper No. 2002/005\n- Issue: 005\n- Volume: 2002\n- ISBN: 9781451842197\n- ISSN: 1018-5941\n- DOI: https://doi.org/10.5089/9781451842197.001\n\nEvan C Tanner and Alberto M. Ramos, \"Fiscal Sustainability and Monetary Versus Fiscal Dominance: Evidence From Brazil, 1991-2000\", IMF Working Papers 2002, 005 (2002).\n\n---\n\n Content in this bundle\n\n- wp0205\n  - wp0205 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0205 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-monetary-versus-fiscal-dominance-evidence-from-brazil-1991-2000-15565"
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    "Authors: Evan C Tanner, Alberto M. Ramos",
    "Published: January 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451842197.001",
    "Under a monetary dominant (MD) regime, the primary surplus adjusts to limit debt growth, permitting monetary policy to be conducted independently of fiscal financing requirements.",
    "Some evidence favors an MD regime for 1995–97, but not for the decade of the 1990s as a whole.",
    "Fiscal adjustments of 1999 yielded a primary surplus of about 3 percent of GDP, consistent with solvency.",
    "A credible MD regime would require further adjustments of the primary surplus if debt increases, growth falls, or interest rates rise.",
    "Evaluation focuses on Brazil during 1991-2000, with particular attention to 1995–97 and fiscal adjustments in 1999.",
    "The analysis links primary surplus behavior to debt dynamics and the independence of monetary policy.",
    "Consideration of scenarios where debt increases, growth falls, or interest rates rise as triggers necessitating additional primary surplus adjustments.",
    "Maintain or strengthen primary surplus adjustments to limit debt growth to sustain solvency.",
    "Recognize that temporary fiscal adjustments (such as 1999’s) may be insufficient: further consolidation could be required under adverse developments (higher debt, lower growth, higher interest rates).",
    "For monetary policy to operate independently (MD regime), fiscal policy must credibly commit to surpluses that stabilize or reduce public debt given prevailing growth and interest-rate conditions.",
    "Period analyzed: 1991-2000",
    "Subperiod with favorable MD evidence: 1995–97",
    "Primary surplus after 1999 adjustments: about 3 percent of GDP",
    "Pages: 30",
    "Series: Working Paper No. 2002/005",
    "Issue: 005",
    "Volume: 2002",
    "ISBN: 9781451842197",
    "ISSN: 1018-5941",
    "DOI: https://doi.org/10.5089/9781451842197.001",
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