Tuesday, September 10, 2019

Brazilian fuel pricing policy

The paper accepted on APPLIED ECONOMICS is published: 

https://www.tandfonline.com/eprint/ITSB7TPFI7PMKWII3STJ/full?target=10.1080/00036846.2019.1659929
 

"On the Brazilian fuel pricing policy: a Gaussian factor model approach" discusses how to extract volatility from fuel prices in local currency. The recent truck drivers strike due the current pricing policy opened the discussion on how to deal with this issue. Big oil companies know how to survive in a high volatility environment, i.e. hedging their positions with sophisticated financial instruments. However this is not true for truck drivers. We hope to give some light on the discussion of this problem using practical concepts available on finance literature.​

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