... gap, and thus NRIR, and investigating whether their effect is temporary or permanent (see Tovar and others, 2012 for a discussion of the duration of the effects of MaPPs). Box 2 suggests that the ... estimate the two unobservable variables the NRIR and potential GDP—using a Kalman filter. For simplicity, we assume that the NRIR follows a random walk, and the residual term has zero mean and variance ... high by regional 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...