Abstract
In august of 2011, the Brazilian central bank took measures of monetary policy that signalized he was less committed with inflation. Such an event inspired this study. The objective of this paper is to come up with way to estimate parameters from the central bank loss function, in a way that they vary over time, during the Brazilian inflation targeting regime. This allows us to analyze if there were changes in the preferences of the central bank. To do so, state-space models were used. Results show that preferences in fact changed over time, which might be an indication of discretion in the Brazilian monetary policy.
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