REGIONALS ASYMMETRICS IMPACTS OF EXCHANGE RATE POLICY IN BRAZIL: AN APPROACH WITH THE METHOD VAR

Abstract

In this article, we present a discussion of exchange rate policy and its potential asymmetric effects in regional terms for Brazil. The main focus is to examine how state economies are affected by variations in the level of rates. The strategy is based on modeling vector autoregressive (VAR) for data between 2000 and 2011, available for thirteen major states. The results point to confirm that there is asymmetry in the responses of the Brazilian states facing common macroeconomic shocks, since regionally differentiated impacts were found in the sample used. Thus, we show that characteristics such as production structure and trade integration in state economies are of paramount importance to explain the different levels of impacts, with very marked differences in the intensity and staging of the answers.