Abstract of associated article: Increasing the independence of a central bank from political influence, although ex-ante socially beneficial and initially successful in reducing inflation, would ultimately fail to lower inflation permanently. The smaller anticipated policy distortions implemented by a more independent central bank would induce the fiscal authority to decrease current distortions by increasing the deficit. Over time, inflation would increase to accommodate a higher public debt. By contrast, imposing a strict inflation target would lower inflation permanently and insulate the primary deficit from political distortions.

Abstract This paper aims to discuss the connection between monetary policy and public debt in Brazil, highlighting the consequences. To do so, it begins with a historical resumption of the emergence of the market for public debt and the institutions responsible for its management. This is followed by an analysis of the data on the variables related to monetary policy and public debt between 1999 and 2016. From this analysis, we observed the existence of a problematic connection between two policies - monetary and fiscal - given by the Selic rate, which is both an instrument to control the inflation and the rate that remunerates a significant portion of public debt. The paper concludes that this link reduces the effectiveness of these policies, requiring actions such as the untying of monetary policy and public debt, the increase in the term and duration of debt, the change in composition and, particularly, a reduction of the Selic rate.

Monetary policy is generally regarded as a central element in the attempts of policy makers to attenuate business-cycle fluctuations. According to the New Keynesian paradigm, central banks are able to stimulate or depress aggregate demand in the short run by adjusting their nominal interest rate targets. The effects of interest rate changes on aggregate consumption, the largest component of aggregate demand, are well understood in the context of this paradigm, on which the canonical "workhorse'' model used in monetary policy analysis is grounded. A key feature of the model is that aggregate consumption is fully described by the amount of goods consumed by a representative household. A decline in the policy rate for instance implies that the real interest rate declines, the representative household saves less and hence increase its demand for consumption. At the same time, general equilibrium effects let labour income grow causing consumption to increase further. However, the mechanism outlined above ignores a considerable amount of empirically-observed heterogeneity among households. For example, households with a higher earnings elasticity to interest rate changes benefit more from a rate cut than those with a lower elasticity; households with large debt positions are at a relative advantage over households with large bond holdings; and households with low exposure to inflation are relatively better off than those holding a sizeable amount of nominal assets. As a result, the contribution to the aggregate consumption response differs substantially across households, implying that monetary expansions and tightenings produce relative "winners'' and relative "losers''. The aim of the project laid out in this proposal is to give a disaggregated account of the heterogeneous effects of monetary-policy induced interest rate changes on household consumption and a detailed analysis of the channels underlying them. Additionally, it seeks to draw conclusions about the determinants of the strength of the transmission mechanism of monetary policy. To do so, it relies on a large panel comprising detailed data from the universe of all households residing in Norway between 1993 and 2015 supplemented with additional micro-data provided by the European Commission. I will be assisted by two project partners, Pascal Paul who is a member of the Research Department of the Federal Reserve Bank of San Francisco and Martin Holm who is affiliated with the Research Unit of Statistics Norway and the University of Oslo. In addition, I would like to collaborate with and help train a doctoral student based at the University of Lausanne on this project. Existing empirical studies of the consumption response to monetary policy at the micro level rely on survey data. Therefore, they are subject to a number of severe data limitations. The surveys employed typically have either no or only a short panel dimension, suffer from attrition, include only limited information on income and wealth, are top-coded, and contain a significant amount of measurement error. The administrative data set provided to us by Statistics Norway suffers from none of these issues, implying that we are in a unique position to evaluate the household-level effects of policy rate changes. In a first step, we use forecasts published by the Norwegian central bank to derive monetary policy shocks that are robust to the simultaneity problem inherent in the identification of the effects of monetary policy following Romer and Romer (2004). We then confront the micro-data with the estimated shocks to study the consumption response along different segments of the income and wealth distribution and to test the importance of heterogeneity in labour earnings, financial income, liquid assets, inflation exposure and interest rate exposure among others. The findings will be of high relevance as they will not only allow us to evaluate channels hypothesised in the analytical literature, improve our understanding of the monetary policy transmission mechanism and its distributional consequences but also serve as a benchmark for structural models built both by theorists and practitioners.

The International Social Survey Programme (ISSP) is a continuous programme of cross-national collaboration running annual surveys on topics important for the social sciences. The programme started in 1984 with four founding members - Australia, Germany, Great Britain, and the United States – and has now grown to almost 50 member countries from all over the world. As the surveys are designed for replication, they can be used for both, cross-national and cross-time comparisons. Each ISSP module focuses on a specific topic, which is repeated in regular time intervals. Please, consult the documentation for details on how the national ISSP surveys are fielded. The present study focuses on questions about political attitudes and the role of government. Attitude to observance of laws; attitudes to various forms of protest against the government; willingness to participate and actual participation in public protest events or demonstrations against the government; views regarding freedom of speech for extremists; attitude to miscarriage of justice; perceived threat to the private sphere from governmental data collection and computer networks (privacy protection); income equalization as government task and stand on economy-related measures of government; attitude to increase in government expenditures for environmental protection, public health system, the police, education system, defense, pensions, unemployment benefits, culture; assessment of the power of trade unions, business and government; assessment of the governmental responsibility for social political tasks (protection of old people, students, housing supply, jobs, economic growth through aid to industry, price stability etc.); political interest; general attitudes to politics and the political system (subjective assessment of the political possibilities to influence (efficacy), political extent to which informed, politicians and election promises, satisfaction with democracy); tax reduction versus expansion of social services; assessment of tax equity with various income groups; attitude to privatization or nationalization of selected public facilities; reducing inflation versus fight against unemployment; preference for increased social services or reduction in debt; attitude to amount of income tax for first and second job. Demography: sex; age; living together with a partner; school education; employment status of respondent as well as partner; occupation (ILO/ISCO Code); employment in the public sector; self-employed occupation; hours worked each week; supervisor status; income; family income; religious denomination; religiousness; self-classification of social class; union membership; party preference (left-right orientation); behavior at the polls in the last election; reasons for not voting; size of household; composition of household; degree of urbanization; city size; region; ethnic or national affiliation or origins. Das International Social Survey Programme (ISSP) ist ein länderübergreifendes, fortlaufendes Umfrageprogramm, das jährlich Erhebungen zu Themen durchführt, die für die Sozialwissenschaften wichtig sind. Das Programm begann 1984 mit vier Gründungsmitgliedern - Australien, Deutschland, Großbritannien und den Vereinigten Staaten - und ist inzwischen auf fast 50 Mitgliedsländer aus aller Welt angewachsen. Da die Umfragen auf Replikationen ausgelegt sind, können die Daten sowohl für länder- als auch für zeitübergreifende Vergleiche genutzt werden. Jedes ISSP-Modul konzentriert sich auf ein bestimmtes Thema, das in regelmäßigen Zeitabständen wiederholt wird. Details zur Durchführung der nationalen ISSP-Umfragen entnehmen Sie bitte der Dokumentation. Die vorliegende Studie konzentriert sich auf Fragen zu politischen Einstellungen und der Rolle der Regierung. Einstellung zur Befolgung von Gesetzen; Einstellungen zu verschiedenen Protestformen gegen die Regierung; Teilnahmebereitschaft und tatsächliche Teilnahme an öffentlichen Protestveranstaltungen oder Demonstrationen gegen die Regierung; Ansichten bezüglich der Meinungsfreiheit für Extremisten; Einstellung zu einem Justizirrtum; empfundene Bedrohung der Privatsphäre durch staatliche Datensammlungen und Computer-Vernetzungen (Datenschutz); Einkommensangleichung als Staatsaufgabe und Haltung zu wirtschaftsbezogenen Maßnahmen der Regierung; Einstellung zur Erhöhung von Regierungsausgaben für Umweltschutz, Gesundheitswesen, Polizei, Bildungswesen, Verteidigung, Renten, Arbeitslosenunterstützung, Kultur; Einschätzung der Macht von Gewerkschaften, Wirtschaft und Staat; Einschätzung der staatlichen Verantwortlichkeit für sozialpolitische Aufgaben (Absicherung von alten Menschen, Studenten, Wohnungsversorgung, Arbeitsplätzen, Wirtschaftswachstum durch Hilfen an die Industrie, Preisstabilität etc.); politisches Interesse; generelle Einstellungen zur Politik und zum politischen System (subjektive Einschätzung der politischen Einflußmöglichkeiten (efficacy), politische Informiertheit, Politiker und Wahlversprechen, Demokratiezufriedenheit); Steuersenkung versus Sozialleistungsausbau; Einschätzung der Steuergerechtigkeit bei verschiedenen Einkommensgruppen; Einstellung zur Privatisierung oder Verstaatlichung ausgewählter öffentlicher Einrichtungen; Inflationssenkung versus Bekämpfung von Arbeitslosigkeit; Präferenz für vermehrte Sozialleistungen oder Schuldenabbau; Einstellung zur Höhe der Einkommenssteuer für Erst- und Zweitbeschäftigung. Demographie: Geschlecht; Alter; Zusammenleben mit einem Partner; Schulbildung; Beschäftigungsstatus des Befragten sowie des Partners; Beruf (ILO/ISCO-Code); Beschäftigung im öffentlichen Sektor; selbständige Beschäftigung; Wochenarbeitsstunden; Vorgesetztenstatus; Einkommen; Familieneinkommen; Konfession; Religiosität; Selbsteinstufung der Schichtzugehörigkeit; Gewerkschaftsmitgliedschaft; Parteipräferenz (links-rechts-Orientierung); Wahlverhalten bei der letzten Wahl; Gründe für Nichtwahl; Haushaltsgröße; Haushaltszusammensetzung; Urbanisierungsgrad; Ortsgröße; Region; ethnische oder nationale Zugehörigkeit bzw. Herkunft.