Financialization, coalition of interests and interest rate in Brazil
Studying the hypothesis of a pro-conservative monetary policy convention in Brazil, as initially formulated by Bresser-Pereira and Nakano (2002) and Erber (2011), we add three particular sub-hypotheses to it: (i) the prevalence of high real interest rates in Brazil for decades has led to the formati...
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Main Authors: | , , |
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Format: | Article |
Language: | English |
Published: |
Association Recherche & Régulation
2020-06-01
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Series: | Revue de la Régulation |
Subjects: | |
Online Access: | https://journals.openedition.org/regulation/16636 |
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Summary: | Studying the hypothesis of a pro-conservative monetary policy convention in Brazil, as initially formulated by Bresser-Pereira and Nakano (2002) and Erber (2011), we add three particular sub-hypotheses to it: (i) the prevalence of high real interest rates in Brazil for decades has led to the formation of a rentier-financial class coalition. Its aim is to maintain high real interest rates so as to gain from the resulting financialization process, fueled by interest revenues (ii) the existence of a “two-way“ public debt contagion effect between the banking reserves market and the public securities market; and (iii) the use of a high interest rate to finance current account deficits. To this end, the paper adopts as its starting point Keynes’s view of the interest rate as an eminently conventional phenomenon. |
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ISSN: | 1957-7796 |