The paper evaluates the effectiveness of countercyclical measures taken by the Brazilian government to mitigate the effects of high-risk mortgage crises. In this context, the article examines the impact of monetary, fiscal and credit policies on some major macroeconomic variables. Consequently, the authors argue that expansionary credit policies are a decisive factor for increasing household consumption and aggregate output in Brazil during periods of crisis.
The document is organized into four sections. After an Introduction, the second section presents some methodological aspects of the research, emphasizing on the databases used. Meanwhile, the third section provides some estimates of the effects of countercyclical measures implemented by the Brazilian government, whilst the fourth and final section presents the results and conclusions of the investigation.
To conclude, the authors argue that while expansionary monetary policies are essential to increase aggregate output during periods of crisis, investment appears not to be sensitive to anti-cyclical policies. Consequently, the document suggests that expansionary credit policies are a key factor to increase domestic consumption, thus serving as a useful tool to hinder the effects of mortgage crises in Brazil.