An empirical analysis of the relationship between real wage appreciation and inflation in Brazil

This paper analyzes if there was a transmission from the policy of real minimum wage adjustments undertaken in Brazil from 1995 to 2016 to consumer inflation. The literature that grounds the analysis is post Keynesian economics. To measure the impact of the minimum wage appreciation policy on inflation, the econometric strategy consisted of the VAR (Vector Autoregression) method. The study researches the Brazilian economy between 2003 and 2016, as this was the period in which the policy occurred. The empirical results indicate that the real readjustments of the minimum wage passed to inflation, but the value of this transmission was small.