Inflation and stabilization in Brazil: a political economy analysis

Alfredo Saad-Filho and Maria de Lourdes Mollo ()
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Alfredo Saad-Filho: Department of Development Studies, SOAS, University of London, Thornhaugh Street, Russell Square, London WCJ OXG, UK; Tel.: +44-20-7898-4504; fax: +44-20-7898-4519 as59@soas.ac.uk

Review of Radical Political Economics, 2002, vol. 34, issue 2, 109-135

Abstract: This article outlines a political economy analysis of Brazilian high inflation and stabilization. The paper explains the distributive and monetary aspects of inflation and the gradual fragmentation of the Brazilian currency. It also reviews the most important aspects of the Real stabilization plan, the de-indexation of the economy, and its rapid "liberalization" and "internationalization." The paper shows that, in spite of the successful reduction of inflation, the Real plan was highly vulnerable to shifts in international liquidity; partly for these reasons, it led to de-industrialization and high unemployment. In addition to this, the Real plan contributed to an increase in income inequality and the development of sharp social conflicts in Brazil. These weaknesses were the main factors responsible for the currency crisis in January 1999.

Keywords: Brazil; Inflation; Stabilization policy (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:34:y:2002:i:2:p:109-135

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