Monetary policy velocity and its financial effects: an empirical analysis for an emerging economy


  • Ricardo Ramalhete Moreira Federal University of Espírito Santo



monetary policy velocity, stock market, GMM, MS-regression, Brazil


We contribute to the literature of monetary policy evaluation by proposing a concept and a measurement process of monetary policy velocity. Furthermore, we develop a theoretical model explaining how changes in such a velocity index are accompanied by effects in stock prices. Based on the case of Brazil’s economy from February 2003 to December 2016, our empirical findings indicate that the Brazilian Central Bank robustly affected the domestic stock market level by adjusting monetary policy velocity over time, although such effects were performed in asymmetric ways.

JEL codes: E43, E52

Author Biography

Ricardo Ramalhete Moreira, Federal University of Espírito Santo

Professor of Economics at the Federal University of Espírito Santo, Brazil. CNPq's researcher.


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How to Cite

Moreira, R. R. (2020). Monetary policy velocity and its financial effects: an empirical analysis for an emerging economy. PSL Quarterly Review, 72(291), 279–295.