Fábio Augusto Giannini

This dissertation aims to test the importance of the nominal shocks over real economy, contrasting the real business cycle theory and the new-keynesian theory for the Brazilian economy, studying the period between 1992 and 2007. Under the hypothesis of that the existing cycles in the Brazilian economy from economic policy can be explained by one of schools of economic thought. This work presents an analysis of time series, inside of the identification of the cyclical component of the variables. Testing the hypothesis established, it uses vector auto-regression models (VAR), that it is adjusted for stationary series. Also, the impulse-response functions are used as an instrument and we show the analysis of exogeneity. The results indicate that technological and monetary shocks are able to bring business cycles at the Brazilian economy. It agrees with new Keynesian thoughts, because the Real Business Cycle Theory does not accept cycle sources from monetary shocks. Hence, based on the econometrics results, we interpret the business cycles of Brazilian economy like the new Keynesian theory.