Who Bears the Burden of Monetary Tightening? Credit Default Responses Across Income Groupsand Firm Sizes in Brazil

Who Bears the Burden of Monetary Tightening? Credit Default Responses Across Income Groupsand Firm Sizes in Brazil | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Who Bears the Burden of Monetary Tightening? Credit Default Responses Across Income Groupsand Firm Sizes in Brazil Pedro Igor Araujo de Oliveira, Ramon Lima Ribeiro, Victor Lira Stilita This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8370050/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper examines heterogeneous monetary transmission to credit default inBrazil, exploiting granular disaggregation by income bracket, firm size, and state.Using monthly Central Bank data from 2012 to 2024 covering all 27 Brazilianstates, we identify three central findings with direct policy implications. First, wedocument robust Granger causality from the benchmark interest rate to defaultin specific population and business segments, with average lags of 6-7 months forindividuals and 10-14 months for corporations; temporal horizons consistent withinternational literature on monetary policy transmission through credit channels.Second, we establish clear vulnerability gradients: for individuals, middle classes(2-10 minimum wages) are most vulnerable relative to lower or higher incomegroups; for corporations, micro and small firms are substantially more vulner-able than medium firms, with large firms showing no significant vulnerability.Third, we show that predictive causality plus impulse responses can still deliveractionable guidance without full structural identification; and (ii) highlightingdistributional costs of tightening, which disproportionately raise defaults amongmiddle-income households and small businesses. JEL Classification: C32 , E43 , G21 Default Monetary policy Regional heterogeneity Income Firm size Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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