Empirical Economics

, Volume 57, Issue 6, pp 1979–1996 | Cite as

Importance of credibility for business confidence: evidence from an emerging economy

  • Helder Ferreira de MendonçaEmail author
  • André Filipe Guedes Almeida


This study investigates the main factors affecting the confidence of the entrepreneur and, in particular, the effect caused by the credibility of monetary policy. We estimate the effect of credibility on business confidence by using two alternative measures of ability of the Brazilian central bank to meet the policy targets. The findings indicate that the credibility of the monetary policy can reduce uncertainty level in the economy, thus permitting an improvement for the entrepreneurs in their decision making. Furthermore, the results indicate that an increase in the institutional instability can bring a deterioration in the business confidence.


Credibility Business confidence Expectations Institutional instability 

JEL Classification

E58 M21 M13 


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  • Helder Ferreira de Mendonça
    • 1
    Email author
  • André Filipe Guedes Almeida
    • 2
  1. 1.Department of Economics and National Council for Scientific and Technological Development (CNPq)Fluminense Federal UniversityRio de JaneiroBrazil
  2. 2.Brazilian Institute of Geography and StatisticsRio de JaneiroBrazil

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