Commodity prices shocks and the Brazilian economy in the 2000s

Abstract

This paper evaluates how falling commodity prices affected the Brazilian economy during the 2000s. In order to fulfill this objective two different statistical methods were used, the Markov Switching Dynamic Regression model with structural component and the Vector Autoregression (VAR) model. With respect to the level of activities, it was found that about 1/3 of the economic slowdown post 2014 could be attributed to the change in the commodities prices regime.