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...
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Published in | Applied economics Vol. 54; no. 11; pp. 1229 - 1242 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
London
Routledge
03.03.2022
Taylor & Francis Ltd |
Subjects | |
Online Access | Get full text |
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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. |
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ISSN: | 0003-6846 1466-4283 |
DOI: | 10.1080/00036846.2021.1975031 |