rate.It is worth noting that in 2004, GDP growth was 5.7%, and inflation in the prior year was 9.3%, while in 2008/2009, GDP growth ran at -0.3% while inflation in the prior year was 5.9%.Focus on market prices inflation: we expect a higher pass-through of the current BRL weakening (18%) than observed in 2008/2009, ceteris paribus. This is based on the economy growing faster (1.9%), the initial inflation being higher (6.5%), and a significant monetary stimulus (the real interest rate is below 2%) being under way in order to further stimulate domestic demand. The modelWe define the pass-through as the relationship between accumulated market prices inflation (market prices inflation and industrial wholesale prices inflation) in n periods and the exchange rate depreciation also accumulated in n-th period, but lagged by one month in order to allow inflations response to a change in the exchange rate. Our IPCA pass-through exercise focused on measuring the pass-through to market prices inflation, which represents 76% of IPCA. To control the effects of the business cycle, real exchange rate, initial inflation, and trade openness on the exchange rate pass-through to market prices inflation, the model also considered as explanatory variables the GDP deviation from trend, which was constructed using the Hodrik-Prescott (HP) filter; the REER deviation from trend, that was also constructed using the HP filter; the initial inflation (market prices inflation) lagged by one month; and trade openness, measured as the sum of exports and imports as a percentage of GDP (accumulated in 12 months). In this approach, we ran a Generalized Method of Moments (GMM) model to measure the pass-through coefficient, controlling for endogeneity problems, which occur when the economic variables are mutually dependent, as is the case here. The estimates for the pass-through to inflation in 3, 6, 9, 12, and 15 months are presented in the table below.As expected, according to our exercise, in the very short run the effect of BRL depreciation on inflation does not seem statistically significant and the sign was different than expected. Moreover, REER, output gap, and openness are not significantly different than zero. Only initial inflation is statistically significant, in-line with macroeconomic theory. Looking six months ahead, the pass-through coefficient reached 3.5%, and the business cycle, initial inflation, and openness variables are significantly different than zero and with the expected signs. For 9 and 12 months ahead, the pass-through coefficient reaches its limit between 4.5% and 11.0%, where most of the other relevant variables appear with the expected signs and are significantly different than zero. After 12 months, the pass-through coefficient decreases and becomes statistically not significant.In our wholesale price indexs pass-through exercise, to control the effects of the business cycle, initial inflation, trade openness, and commodity prices on the exchange rate pass-through to industrial wholesale prices inflation, the model considered as explanatory variables the same variables used in the IPCAs pass-through exercise except REER, and included the commodity prices variation, which was constructed using the same method of the exchange rate depreciationaccumulated in n-th period, but lagged by one month in order to allow inflations response