global-journal-of-management-and-business-research-c-finance Global Journal of Management and Business Research - C: Finance 0975-5853 2249-4588 Global Journals Publishing Group Incorporated 75919 Study of the Trilemma Policies and Their Impacts on Inflation, Growth and Volatility for Brazil HsingDr. Yu UNITED STATES, Southeastern Louisiana University, USA. 15 01 2013 13 C5 27 32

This paper finds support for the trilemma for Brazil, suggesting that the three trilemma policies are binding and constrained. Adopting an independently floating exchange rate regime, Brazil has pursued the policy combination of monetary independence and financial integration in recent years. More exchange rate stability or more financial integration reduces the inflation rate, and more financial integration reduces inflation volatility. More monetary inde-pendence reduces the growth rate. More financial integration reduces output volatility. Hence, more exchange rate stability and more financial integration produce positive benefits whereas more monetary independence yields a negative impact on the growth rate.

 trilemma; exchange rate stability; monetary independence; financial integration; inflation; growth; volatility. Full Text

This paper finds support for the trilemma for Brazil, suggesting that the three trilemma policies are binding and constrained. Adopting an independently floating exchange rate regime, Brazil has pursued the policy combination of monetary independence and financial integration in recent years. More exchange rate stability or more financial integration reduces the inflation rate, and more financial integration reduces inflation volatility. More monetary independence reduces the growth rate. More financial integration reduces output volatility. Hence, more exchange rate stability and more financial integration produce positive benefits whereas more monetary independence yields a negative impact on the growth rate.