Daniel Valente Dantas

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NBER Working Papers and Publications

December 1984Anticipated Budget Deficits and the Term Structure of Interest Rates
with Rudiger Dornbusch: w1518
This paper investigates the implications of government deficits in an overlapping generations consumption loan model with longterm assets. The only asset in the economy is a real consol issued by the government and serviced by lumpsum taxes on the young. We explore here the time path of short and longterm interest rates following the announcement of a future,transitory budget deficit under two alternative assumptions. In one case the deficit arises from transitory government spending, in the other case from a transfer.We show that a deficit policy ultimately raises longterm interest rates and lowers consol prices. The exact shape of the path of short-term rates depends on the source of the deficit and on the saving response to interestrates. In general, though, the term structure will be v...
December 1980A Model of the Black Market for Dollars
with Rudiger Dornbusch, Clarice Pechman, Roberto de Rezende Rocha, Demetrio Simoes: w0590
The paper develops an analytical framework to discuss the determinants of the premium in the black market for dollars in Brazil. While the specific details of the model were chosen with the Brazilian case in mind, the structure of the model is quite general and suitable for application to black markets for currency elsewhere. The building blocks of the model are three. A capital asset pricing approach is used to derive an asset demand for dollars, or equivalently a real yield premium in market equilibrium. The current account of the black market is specified in terms of the sources and uses in the flow market for dollars, mainly smuggling proceeds and flows associated with tourism. The model is closed by a model of official exchange rate policy and the assumption of rational expectations. ...

Published: Dornbusch, Rudiger; Dantas, Daniel Valente; Pechman; Rocha, Roberto de Rezende; and Simoes Demetrio. "A Model of the Black Market for Dollars." The Quarterly Journal of Economics, (February 1983).

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