Inflation targeting in Brazil: constructing credibility under exchange rate volatility

This paper assesses the challenges faced by the inflation-targeting regime in Brazil. The inflation-targeting framework has played a critical role in macroeconomic stabilization. We stress two important challenges: construction of credibility and exchange rate volatility. The estimations indicate the following results: (i) the inflation targets have worked as an important coordinator of expectations; (ii) the Central Bank has reacted strongly to inflation expectations; (iii) there has been a reduction in the degree of inflation persistence; and (iv) the exchange rate pass-through for “administered or monitored” prices is two times higher than for “market” prices.     

Single-family housing transactions: Seller motivations, price, and marketing time

Factors such as relocation and financial distress motivate the seller of a single-family home to facilitate sale by posting a lower list price, communicating the motivations to the marketplace, or offering sales incentives to agents. Impacts of seller motivations on selling prices and marketing times are estimated using data for single-family homes sold in Arlington, Texas, from 1991 to 1993. Results show selling price discounts for houses with sellers who are either eager, motivated, or anxious, houses with sellers who have relocated, foreclosures, and vacant houses. Only foreclosure houses show the reduced marketing time expected for properties with motivated sellers. The results further suggest that the list price is the seller's primary mechanism for selling the property. Reducing the list price fosters faster sales at the sacrifice of the selling price.