Acording to Taylor,
Selic = neutral real rate + inflation target + 1.5*(expected inflation - inflation target)
I've decided to delete the output gap term because we all disagree about it.
Nowadays expected inflation is around 6%.
For the target and neutral rate, I suggest the following cases:
i) Tombini's mind: neutral rate = 4%, target = 4.5%, which implies Selic = 10.75%
i) My own mind: neutral rate = 5%, target = 5.5%, which implies Selic = 11.25%
Não acha que o risco país deveria ser incluido na conta como uma proxy para variações na taxa natural ?
ReplyDeletemy take is that although the neutral rate should affect monetary policy (and thus should be included in the taylor rule), in practice it does not
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