O ajustamento cíclico dos gastos públicos federais brasileiros

Abstract

The goal of this paper is to construct a cyclically adjusted quarterly series for Brazilian public spending during the nineties. Throughout the removal of the budget part that is due to changes in economic environment, we obtain an index of discretionary changes in fiscal policy. The method suggested by Blanchard is used to do so. We find that the budget endogenous share has strong negative relation with inflation, but not with GDP. This result is a clear evidence of Bacha effect, which points out that inflation in Brazil serves as an instrument for the reduction of government spending.