Canaries and Vultures: A Quantitative History of Monetary Mismanagement in Brazil

Pedro Albuquerque and Solange Gouvea
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Solange Gouvea: DEPEP - Departamento de Estudos e Pesquisas - Banco Central do Brasil

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Abstract: During the last two decades of the twentieth century, Brazil went through a sequence of failed stabilization plans that tried to cope with an enduring hyperinflation. This paper uses a money demand model to evaluate monetary policies during those episodes. Consistency between money supply and expected conditional money demand growth rates is considered for each plan. It is shown that unsuccessful programs were marked by excessive liquidity. The results not only suggest that monetary mismanagement led to the failure of the plans, but also that the excessive liquidity could have been predicted.

Keywords: Money demand; Money supply; Monetary policy; Inflation; Stabilization; Brazil (search for similar items in EconPapers)
Date: 2009-04
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Citations: View citations in EconPapers (3)

Published in Journal of International Money and Finance, 2009, 28 (3), pp.479-495. ⟨10.1016/j.jimonfin.2008.12.005⟩

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Journal Article: Canaries and vultures: A quantitative history of monetary mismanagement in Brazil (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00746537

DOI: 10.1016/j.jimonfin.2008.12.005

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