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Fernando Marques Mansilla, Elano Ferreira Arruda and Roberto Tatiwa Ferreira
''Trade openness and inflation dynamics in Brazil''
( 2020, Vol. 40 No.3 )
This work examines the possible asymmetries of Brazil's inflation dynamics in distinct trade openness regimes. For that purpose, we estimate a nonlinear Hybrid New Keynesian Phillips Curve (HNKPC) with the degree of trade openness as the threshold variable. We use monthly data between January 2002 and December 2017 and econometric models with threshold effects in the presence of endogenous regressors. The results indicate the absence of a tradeoff between inflation and unemployment and of inflation inertia in the regime with the most openness. However, in the regime with the least openness, these variables are statistically significant.
Keywords: Trade Openness, Phillips Curve, Inflation
JEL: O5 - Economywide Country Studies: General
F4 - Macroeconomic Aspects of International Trade and Finance: General
Manuscript Received : Jul 19 2019 Manuscript Accepted : Jul 14 2020

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