Determinants of consumer confidence and monetary policy dynamics in Brazil

  • Rafaela Maiara Caetano Universidade Federal de Lavras
  • Cleomar Gomes da Silva Universidade Federal de Uberlândia
Keywords: Consumer Confidence, Monetary Policy, ARDL, Cointegration


The aim of this article is to investigate the determinants of consumer confidence in Brazil and possible impacts on monetary policy actions. The econometric methodology applied is based on Autoregressive Distributed Lag (ARDL) Models, particularly the Bounds Testing (ARDL) Approach to Cointegration. For monthly data between January 2003 and December 2016, the empirical results suggest that there is a long run relationship between consumer confidence and the other variables analyzed. As for short-run dynamics, the error correction mechanism varies between 1.9% and 8.7%, depending on the estimated model. This suggests that economic variables influence consumer confidence, and when there is a break in confidence, its recovery is very slow.

Author Biography

Rafaela Maiara Caetano, Universidade Federal de Lavras

Bachelor in Economics at Universidade Federal de São João del Rei (UFSJ)

Mphil in Applied Economics at Universidade Federal de Uberlândia (UFU)

PhD candidate in Business at the Departamento de Administração e Economia - Universidade Federal de Lavras (UFLA)


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