## Inferring Structural Beliefs from Macroeconomic Expectations: Evidence from Brazil

_IMF Working Papers, August 21, 2026_

## Source details

**Canonical URL:** [Inferring Structural Beliefs from Macroeconomic Expectations: Evidence from Brazil](https://www.imf.org/en/publications/wp/issues/2026/08/20/inferring-structural-beliefs-from-macroeconomic-expectations-evidence-from-brazil-578997)

## Other formats

- [Markdown version](/en/publications/wp/issues/2026/08/20/inferring-structural-beliefs-from-macroeconomic-expectations-evidence-from-brazil-578997/index.md)
- [Structured JSON version](/en/publications/wp/issues/2026/08/20/inferring-structural-beliefs-from-macroeconomic-expectations-evidence-from-brazil-578997/index.json)
- [Bundle manifest](/en/publications/wp/issues/2026/08/20/inferring-structural-beliefs-from-macroeconomic-expectations-evidence-from-brazil-578997/bundle-manifest.json)

## Bibliographic details
- Authors: Philip Barrett
- Published: August 21, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229056199.001

---

### Summary and main findings
- Analysis covers multi-horizon market forecasts for macroeconomic variables in Brazil from 2010 to 2026, interpreted through a structural macroeconomic model that maps stated beliefs into a coherent belief system.
- Produces time-varying beliefs about:
  - policy rules,
  - transmission mechanisms,
  - structural shocks.
- Key empirical findings:
  - Beliefs about the monetary policy rule vary in two distinct dimensions, with the perceived target and Taylor response coefficients showing independent variation.
  - Monetary transmission is seen as weak; the perceived Phillips and IS curves are very flat.
  - Markets see fiscal policy as increasingly unresponsive to higher debt.
  - The perceived inflation target is unchanged after an unexpected monetary tightening, but the perceived response to inflation increases, with larger effects for monetary surprises and smaller for news shocks.

### Methodology (as described)
- Uses a structural macroeconomic model to interpret multi-horizon market forecasts as outcomes of a coherent belief system.
- Infers time-varying perceived parameters: policy-rule parameters (including perceived target and Taylor response coefficients), transmission parameters (Phillips and IS curves), and perceived fiscal responsiveness.

### Policy-relevant implications
- Weak perceived monetary transmission and very flat perceived Phillips and IS curves suggest limited output and inflation response to policy rate changes as expected by market participants.
- Independent variation in perceived target and response coefficients implies that credibility and reaction-strength are separate dimensions for market beliefs about the monetary authority.
- Increasing market perception that fiscal policy is unresponsive to higher debt highlights concerns about fiscal sustainability and market confidence in fiscal adjustment.
- After unexpected monetary tightening, unchanged perceived inflation target but higher perceived response to inflation indicates markets interpret tightening as a strengthening of the central bank’s reaction function rather than a change in the goal.

---

## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2026/english/wpiea2026173-source-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2026/english/wpiea2026173-source-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2026/08/20/inferring-structural-beliefs-from-macroeconomic-expectations-evidence-from-brazil-578997_