Working Papers

I study how fiscal policy credibility shaped inflation dynamics in Brazil. I begin with an analytic historical and literature review of Brazil's hyperinflation and failed stabilization attempts, showing how credible fiscal, monetary and microeconomic commitments mattered for disinflation. I then examine two modern inflation episodes from 2001 to 2019, a period with an established, credible central bank regime but under moments of fiscal policy shifts. I use Vector Autoregressions and impulse response functions on monthly fiscal, monetary and financial data. I introduce sovereign credit default swap (CDS) premia as a market signal of expected fiscal sustainability and find a correlation between CDS premia and unexpected inflation. This evidence is consistent with work that highlights the joint role of fiscal and monetary authorities in anchoring inflation.

Credit card receivables in Brazil settle in T+30, creating a market for short-term advances that was historically costly and fragmented. Before 2018, each receivable was recorded only by the originating card acquirer, limiting access to other financing providers. The central bank required these receivables to be securitized via registration entities, creating standardized, centralized records. A difference-in-differences analysis shows that relative to the control, treated financing rates fell by around 25 basis points, maturities shortened slightly, and new advances as a share of outstanding loans rose following the reform. This case study shows how market design interventions – information standardization, broader access and greater transparency – enhanced competition and lowered the cost of financing for small and medium-sized enterprises (SMEs).

Keynes and Friedman, often thought of as antagonists, for different reasons reached a rare point of agreement: they shared a skepticism of the mechanistic use of mathematics in economics that started around their time.

Competition between card schemes (Visa, Mastercard) produces an unexpected market failure: by competing to sign up banks as card issuers, schemes drive up the fees paid by merchants on the other side of the network.