Can credibility offset electricity price effect on business confidence? An empirical investigation from a large emerging economy

We analyse the 'offsetting effect' that the central bank credibility can have in mitigating the harmful effects of the increase in electricity price on business confidence. Based on data from the Brazilian economy from 2010 to 2019, we perform several regressions with different specificati...

Full description

Saved in:
Bibliographic Details
Published inApplied economics Vol. 54; no. 11; pp. 1229 - 1242
Main Authors de Mendonça, Helder Ferreira, Finn, Eduardo Schirmer
Format Journal Article
LanguageEnglish
Published London Routledge 03.03.2022
Taylor & Francis Ltd
Subjects
Business
business confidence
central bank credibility
Central banks
Credibility
Economic analysis
Economic theory
Electricity
Electricity price
emerging economy
Q43
Brazil
Online AccessGet full text

Cover

More Information
Summary:We analyse the 'offsetting effect' that the central bank credibility can have in mitigating the harmful effects of the increase in electricity price on business confidence. Based on data from the Brazilian economy from 2010 to 2019, we perform several regressions with different specifications and methods, taking into account aggregate level and the eleven industrial sectors with higher electricity consumption. In general, our findings support the view that an increase in electricity price harms business confidence, but there is an 'offsetting effect' when central bank credibility increases.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036846.2021.1975031