Abstract

Since the 1990s, interest rates have remained high in Brazil, in order to inhibit inflation, and close to zero (or negative) in Japan, to avoid chronic deflation. Based on this antagonism, the impacts, on economic activity, of the monetary policies from these countries were analyzed. Therefore, ARDL (Auto-Regressive Distributed Lag) models with quarterly data from 1996-2019 were used. The results indicate an interdependence between fiscal and monetary policies and suggest that policies with inflationary potential could generate reduced/negative impacts in Brazil (averse to inflation) and increased/positive impacts in Japan (contrary to deflation).

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