Analysis of the relationship between public debt and inflation rates in the Brazilian economy from the decade of 1980

Abstract

http://dx.doi.org/10.5902/198346595951

The study aimed to analyze the trajectory of public debt and inflation rates in the Brazilian economy from the 1980s, as well as verify the existence of a causal relationship between variables. To verify the existence of the relationship Tests of Granger causality were conducted. For this, were considered different periods. At first, it was analyzed the entire period (1981-2009), the second, the period before the Real plan (1981-1994) and third, the period after the peal Plan (1995-2009). The results obtained differ from period to period. For the period as a whole, the relationship found indicates that inflation presented to the precedence relation budget deficit. For the period before the Real plan, there was no causal relationship between variables, while for the period after the plan, the causal relationship was found in the sense that the budget deficit to inflation.