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| Fábio A. R. Gomes and Pedro H. M. Prado |
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| ''Inflation targeting in Brazil: Is the official target actually pursued?'' |
| ( 2026, Vol. 0 No.0 ) |
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| This paper investigates whether the Brazilian Central Bank effectively pursues the midpoint of the official inflation target through the estimation of its implicit target using a time-varying parameter model from 2002Q1 to 2024Q4. The results indicate that the implicit target frequently exceeded the official midpoint, especially in 2005-2006 and 2013-2015. This pattern has important implications for central bank credibility and inflation expectations, as persistent deviations between formal targets and effective policy may increase uncertainty about future inflation and erode the anchoring role of the regime. |
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| Keywords: Inflation targeting, Central Bank of Brazil, Implicit inflation target, Time-varying parameter model |
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
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| Manuscript Received : Feb 12 2026 | | Manuscript Accepted : Oct 10 2026 |
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