Public Sector Financial Fragility Index: an analysis of the Brazilian federal government from 2000 to 2016

摘要

This article adapts the Public Sector Financial Fragility Index to exam the Brazilian federal government financial posture over 2000-2016. This Index enables examining public finances based on Minsky's financial fragility hypothesis. The paper undertakes three analyses: one explores the federal government financial fragility using the borrowing requirements data, which is the standard series to assess public finances. The second analysis makes use of the budget execution data, comprising all governmental cash flows, including the financial revenues and expenses but excluding credit operations, which are new debt borrowed by the government; this new debt is considered in the third analysis. The outcomes show that, in its borrowing requirements, the Brazilian government was Speculative over 2000-2013, and Ponzi from 2014 to 2016. Applying the Index to the budget execution data, Brazil was Speculative throughout the period. Considering the budget execution added with credit operations, Brazil was mostly Hedge, although artificially, because built on new debt and not on government revenues. Parallelly, the Index enables analyzing the type of the Brazilian fiscal policy, if pro or countercyclical: it was chiefly procyclical, maintaining Speculative and Ponzi postures whilst the GDP grew, a diverse behavior in relation to the Post Keynesian proposition.