FGV IBRE’s Macro Bulletin celebrates 10th anniversary

The Bulletin was the result of first-of-a-kind collaboration between several areas of FGV IBRE: its Applied Economics Area, which focuses on macroeconomic and growth-related research, and its public statistics departments, which are responsible for price surveys and indexes.

FGV IBRE’s Macro Bulletin, a monthly report on Brazil’s macroeconomic situation produced by the Brazilian Institute of Economics, is 10 years old in 2021. The document was the result of first-of-a-kind collaboration between several areas of FGV IBRE: its Applied Economics Area, which focuses on macroeconomic and growth-related research, and its public statistics departments, which are responsible for price surveys and indexes.

“We were already analyzing subjects such as inflation, monetary policy, fiscal policy, confidence and the labor market. What we did was direct part of this research to generate comprehensive macro projections,” explains Silvia Matos, the Bulletin’s coordinator.

She says that it was created at a moment when the Brazilian economy was feeling the first effects of the prolonged fiscal and monetary stimulus undertaken to mitigate the effects of the international financial crisis in 2008/2009, followed by the series of interventionist measures known as the “New Economic Matrix” during President Dilma Rousseff’s administration.

“We realized that these arrangements were unsustainable and we felt the need to contribute to national debate and promote a better understanding of the challenges that lay ahead for the country,” Matos says.

Armando Castelar, FGV IBRE’s coordinator of applied economics, notes that when the Bulletin was launched, external circumstances also posed many interpretive challenges for researchers.

“From the context of the great international financial crisis, debates emerged, such as the issue of secular stagnation, the impacts of quantitative easing and the role of China, whose presence was expanding around the world,” he says.

Castelar says that the cooperative work involved in creating the Bulletin has resulted in uninterrupted monthly reviews, providing realistic analysis of Brazilian macroeconomics.

“Perhaps the fact that it is an academic institution, which is not investing directly or advising investors, has allowed the Bulletin to be less influenced by the markets’ excessive optimism or pessimism,” he says.

The rigorous work done by the researchers involved in the Macro Bulletin in the last decade has expanded FGV IBRE’s contact with the markets and government. Today, FGV IBRE participates in the Central Bank’s Market Expectations System, which is responsible for the Focus Bulletin. It also maintains dialogue with other federal government institutions, including the Central Bank, National Treasury, Economy Ministry, IBGE, IPEA, state and municipal governments, and international institutions such as the IMF and OECD. Matos says that the drive to strengthen this arm of FGV IBRE’s macroeconomic analysis is the cause and consequence of the creation and enhancement of indicators that diagnose high-frequency economic activity, particularly the GBP Monitor, created in 2016. The Productivity Observatory, created in 2019, has also done important work, such as diagnosing Brazil’s slow economic recovery after the 2014-16 recession.

This continuous improvement sought by researchers is also supported by the Brazilian School of Economics and Finance (FGV EPGE). The Macro Bulletin’s team incorporates state-of-the-art knowledge produced by its professors and students. One of the examples of this sharing, Matos says, is FGV IBRE’s Financial Conditions Index, based on studies by Luana Miranda, an FGV IBRE researcher who is doing a PhD at FGV EPGE.

“This valuable exchange of information helps make the Bulletin’s analysis even richer and more robust, deciphering the next important economic issues for the country, starting with those related to the pandemic,” Matos says.

“The current situation is marked by high unemployment and debt, which will influence public policies and the behavior of the financial markets across the world, including in Brazil,” Castelar says.

Click here to see January’s Macro Bulletin, now in digital format.