... for closed economies. Therefore, our preliminary evidence would suggest that in the majority of the countries considered, interest rate hikes either do not affect credit to the private sector ... standards. Moreover, there is a strong endogeneity between the level of the policy rate the SELIC—and the level of public debt, given that about half of the domestic public debt is indexed to the SELIC. ... factor, and . stands for the utility function; E(.) is the expectation operator, c is consumption, and is per capital potential GDP; the rightmost expression incorporates the resource constraint,...