ROTAPER The percentage change of COPOM members br Econometri

ROTAPER: The percentage change of COPOM members.
Econometric results Table 1 summarizes the unit root tests obtained from the methodology proposed by Dickey–Fuller (ADF), Phillips Perron (PP), Dickey–Fuller GLS (stochastically detrended variables) and KPSS. The results indicate that PU-H71 the output gap (GAPPIB), the expectation of the gap in GDP (EXPGAP), and the LDESVIO are stationary variables. The variable LSELIC (interest rate) is non-stationary in level and stationary in first difference. For the sake of simplicity, we renamed the first difference of LSELIC to DLSELIC. The variable ROTAPER is stationary in level. Table 2 presents the lag-order selection criteria. The VAR lag order selection was based on the Likelihood Ratio (LR), Final Prediction Error (FPE), Akaike (AIC), Schwarz (SC) and Hannan–Quinn (HQ). The selection criteria indicate that the system of equations of the VAR should contain 1 (one) lag by SC and HQ criteria and 3 (three) lags by LR, FPE and AIC criteria. Initially, the equation considers the variables lagged DLSELIC, LDESVIO, EXPGAP, ROTAPER and GAPPIB as explanatory variables. The Wald test for lag exclusion confirmed the significance of the first lag for the turnover variable. However, in order to have a balanced VAR the third lag was included in the model. As a preliminary investigation, an unrestricted VAR model of Eq. (12) is estimated to identify temporal relationships among variables. Besides the described variables, we tested two dummy variables capturing specific effects separately: the Brazilian presidential elections of 2002 and the Energy Crisis occurred in the first semester of 2002. The VAR results indicate that both variables are not significant. The variable expectation of the output gap (EXPGAP) is significant in explaining variations in the Selic rate. Furthermore, lag one and three of the output gap (GAPPIB) were not significant in determining variations in the interest rate. This result is consistent with that of Piza and Dias (2006). Likewise, the turnover variable (ROTAPER) was not significant in the unrestricted VAR equation that explains interest rate changes. Thus, considering a short-run analysis made by the unrestricted VAR, the turnover of COPOM\'s directors has no short run impact on the behavior of the rate of change of the Selic. Yet, the F statistic for the unrestricted VAR model is 8.6 and a R2 of 53%, which means that the variation in the Selic rate results from its own lagged values, the deviation of market expectations from the target, and the expectations of output gap. Another important condition is the VAR stability. The model is stable since all roots are within the unit circle, as shown in Fig. 1.
Conclusion How to overcome the turnover problem? According to Rogoff (1985), the board of directors must have a formal contract that guarantees their compromise with price stability and acting independence. Hence, society should perceive them as independent from any government institution, otherwise the COPOM itself as institution will not have the desired credibility.
Introduction The Brazilian Federal Constitution of 1988 allowed the states to define criteria for transferring part of proceeds from the ICMS tax to the municipalities. In the constitutional text, it was determined that 75% of proceeds from the tax would be appropriated by state government, and the remainder would be divided among the municipalities. Of those 25% destined to the municipalities, at least 18.75% are shared according to the municipality\'s contribution to the added fiscal value, while the rest, i.e., 6.25% (or 25% of the share), can be distributed according to other criteria defined by state legislation. This created a legal support for the states to implement incentive mechanisms to certain municipal actions. In that sense, the state of Paraná was the first to use such support, when in 1991 it created the “Ecological ICMS”. This was a mechanism that aimed to protect the natural springs in the region, in the following manner: if the municipality increased its traditional economic activities, such as the number of industries, it also has to increase its green areas, so that it would not lose its share in tax revenue. Over the years, other states have also designed mechanisms with other specific interests.