This paper presents estimates of Brazilian inflation during the 2000. The results of a structural model with two endogenous variables - wage inflation and product inflation - indicate that: i) the demand indicator was not statistically significant in the product inflation, but was important in explaining wage inflation; ii) variations in the exchange rate and commodity prices were the key determinants to product inflation. Disaggregated estimates revealed that wages played a significant role in determining the price variations of consumer goods and services (not administered by the government). However, wage impacts on final prices in the aggregate model were not significant due to the rise in productivity. Finally, the evidence reported on administered prices by the government suggested that non-monetary policies that were adopted in this decade, consisting of regulatory and fiscal measures, were effective in controlling inflation.
Inflation; Brazilian economy; Price controls; Conflict claims; Time series
