... by the Interest Rate Gap To evaluate the appropriateness of the current monetary stance, we calculate the interest rate gap—defined as the difference between the actual policy rate and the ... rate, the neutral nominal interest rate, stands for the rate of inflation, is the inflation target of the central bank, is the output gap (measured as the percentage ... 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. This...