Abstract
This study investigates the behavior of US and Brazilian central banks (CBs) regarding the recent global financial crisis. The article evaluates their conduct through a systematic review of the minutes from the respective committees' meetings between 2004 and 2011. The key concepts necessary to carry out a proper review were employed, in addition to an awareness of the macroeconomic conjuncture and therefore the ability to anticipate or properly react to the crisis. In both cases, the CBs do not seem to have been able to diagnose the evolution of the macroeconomic environment correctly, mainly in terms of detecting the bubble in the US housing sector, and even to anticipate the bubble bursting when it reached worrying levels. When financial markets panicked, both CBs had to react pragmatically, but in a disorganized way and with haste. They were also possibly unprepared, given the complexity of financial and monetary systems, and the financial interests behind it. Finally, it argues that the inability to anticipate could be found, in part, in the use of conventional macroeconomic models used by the CBs and in the blind faith in the efficient market hypothesis.
Keywords:
Central Banking; Monetary policy; Financial crisis; Lags; Macroeconomics