The Differential Regional Effects Of Monetary And Fiscal Policies In Brazil

The aim of this paper is to examine whether monetary and fiscal policies have symmetric effects across the regions of Brazil. For this, I use a SVAR model in which a Bayesian sign restrictions approach is adopted to identify the shocks. The results indicate that regional products tend to have similar reactions to monetary policy shocks, but asymmetric responses to fiscal policy shocks. Moreover, monetary policy shocks have more influence on economic activity than fiscal policy shocks in all regions.