The impact of monetary variables on the government budget deficit in Brazil for the period (1990-2021)

Abstract

The research aims to study and analyze the impact of some monetary variables (interest rate, exchange rate, money supply in the broad sense, inflation) in the government budget deficit in Latin American countries, taking Brazil as a model for these countries, as the government budget deficit is an outstanding feature during the past decades, the research was based on the hypothesis that: That there are negative and positive long-term reflections between inflation and the budget deficit for most of the monetary variables (interest rate, exchange rate, money supply in the broad sense, inflation) in the budget deficit of the Brazilian economy during the study period (1990-2020), the data was collected through the publications of the bank and the International Monetary Fund, the research used distributed time lag gaps (ARDL), the research has reached a number of results, the most prominent of which was that there are negative effects of monetary variables in the budget deficit, which strengthened the hypothesis from which the research was launched, the research has developed a number of proposals that fit with his findings.