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    • Figs and summarize the main results reported on Table

    2018-10-26

    Figs. 5 and 6 summarize the main results reported on Table 4. In general, both in the case of floating rate and fixed rate linked bonds, yield spreads premiums vary the most for longer maturities. However, the most important difference relates to the sign of the yield spread required by investors: in the case of fixed rate bonds, the spread rises as maturity increases. As for the case of floating rate bonds the opposite occurs. This means that, for the former, the longer the maturity the greater the protection required against risks. As a result, the yield curve is ascending, as commonly observed in developed countries. On the other hand, floating rate bonds have a negative yield spread premium over time, as bondholders are immediately risk protected. These types of bonds have interest rates that are periodically reset and, therefore, a bondholder need not require a higher premium because, ultimately, it will come. For instance, spreads related to fixed rate bonds are higher on the long end of the yield curve, reflecting how agents determine the present value of each future value of those bonds. In order for the long-term interest rates not to exceed the opportunity cost related to productive investment, current measures are necessary to ensure inflationary and fiscal stabilities in the future and, therefore, provide luliconazole of premiums on the long end of the yield curve. With such a decrease, private funding, through debt issuance, becomes less burdened, making room for private investment to step-in and grow. This draws attention to the importance of implementing credible economic policies. In this sense, the recent public debt measures and management strategy are helpful because: (i) issuing fixed rate linked bonds allows for the construction of an ascending yield curve, improving the monetary policy transmission through the wealth effect; (ii) fixed rate linked bonds make fiscal policy more predictable, as debt service expenditures become less volatile, bringing more fiscal stability. Thus, the results expressed in Fig. 5 help us to understand Brazil\'s current debt management strategy, which is aimed at improving the efficiency of monetary policy and also aimed at making government spending more predictable. In both cases, there are important gains in terms of economic policy credibility and in terms of making the long end of the yield curve flatter. As for the floating rate linked bonds, they require lower spread premiums along the term structure of interest rates, in line with the arguments found in Arida (2006) and Lara Resende (2006). These authors argue that floating rate debt securities protect the holder and have a short-term maturity structure once their return adjusts periodically according to the movement in the interest rates to which they are tied. Although the required yield spread premiums show that floating rate bonds reduce systemic risk, they tend to compromise capital market and productive investment. There are two reasons for this. Firstly, private funding becomes more costly, in terms of intangible opportunity costs as well as operational borrowing costs. Secondly, floating rate bonds also replicate their short-term horizon to the economy as a whole.
    Conclusion
    Funding The author thanks CNPQ, FAPEMIG and PROPP-UFU for financial support.
    Introduction Although innovation is rarely addressed in Keynes’ works, it is possible to identify at least four channels through which the post-Keynesian theory can be combined with the neo-Schumpeterian theory to better understand the dynamics of innovation. Firstly, several studies have sought to combine these traditions to understand the relationship between innovation and financial system dynamics, since both approaches consider money and banks as non-neutral (e.g. Gerschenkron, 1962; Zysman, 1983; Christensen, 1992; O\'Sullivan, 2005; Henriques, 2007; Crocco et al., 2008; Raposo and Resende, 2012; Romero and Jayme Jr., 2012). Secondly, post-Keynesians have also sought to use Keynes’ models of asset choice and of formation of expectations to understand the determinants of innovation (e.g. Crocco, 2003, 2008), given that both approaches stress the role of uncertainty in shaping firms’ decisions (e.g. Dosi, 1982; Cimoli and Dosi, 1995; Dequech, 1999a). Thirdly, studies of Keynesian–Kaldorian orientation have combined the two insights investigating the impacts of demand growth (via specialization and division of labour a laKaldor, 1966), technological diffusion and innovation effort on productivity growth (e.g. Oliveira et al., 2006). Fourthly, studies have also attempted to establish a relationship between innovation and trade, using the Keynesian–Kaldorian balance-of-payments constrained growth models as benchmark (e.g. Fagerberg, 1988; Resende and Raposo, 2008; Jayme Jr. and Resende, 2009; Romero et al., 2011). However, much remains to be explained within each of these research topics.