Economic Uncertainty Indicator

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Economic Uncertainty Indicator

The Brazilian Economy Uncertainty Index (IIE-Br) seeks to measure the uncertainty of the Brazilian economy based on information collected from the country's main newspapers as well as the Ibovespa Index and financial market expectations about macroeconomic variables. In the economic literature, uncertainty shocks can generate negative impacts both on companies, discouraging investments and production, and on families, reducing the propensity to consume. In addition to numerous empirical evidence of these results, another impact recently studied is that of decreasing the efficiency of monetary policy. Preliminary results for Brazil suggest that, under high uncertainty, interest rate increases have a reduced effect on inflation control, for example.

Resultados preliminares para o Brasil sugerem que sob alta incerteza, aumentos da taxa de juros tem efeito reduzido no controle da inflação, por exemplo.