A critical evaluation of the Philips’ curve estimations in Brazil

Abstract

This article aims to evaluate critically the estimates of the Phillips curve for the Brazilian economy in recent years, with respect to the theoretical proposition of the accelerationist Phillips curve which is one of the foundations of the model of the New Consensus on Economic Policy. We assessed the three main assumptions of the accelerationist model identified in Serrano (2007) – complete inertia; relationship between output gap and inflation, and supply shocks with mean zero - from the empirical estimates for Brazil. An examination of the results of the Brazilian works is concluded that the hypothesis of the accelerationist curve not are not verified and therefore, conclusions about the causes of inflation, the inflation dynamics and the transmission channels of economic policy are different from those established by the New Model Consensus.