%I Becker Friedman Institute
%L discovery10054392
%X Brazil had a long period of high inflation. It peaked around 100% per year in
1964, and accelerated again in the 1970s, reaching levels above 100% on average
between 1980 and 1994. This last period coincided with severe balance of payments
problems and economic stagnation that followed the external debt crisis in the early
1980s. We show that the high-inflation period (1960-1994) was characterized by a
combination of deficits, passive monetary policy, and constraints to debt financing.
The transition to the low-inflation period (1995-2016) was characterized by
improvements in all those instances, but it did not lead to significant improvements
in economic growth. In addition, we document a strong correlation between
inflation rates and seigniorage revenues, but observing that the underlying inflation
rates are too high for the modest levels of seigniorage revenues. Finally, we discuss
the role of monetary passiveness and indexation in accounting for the unique
features of the inflation dynamics in Brazil in comparison to the other Latin
American countries.
%C Chicago, IL, USA
%O This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions.
%A M Garcia
%A J Ayres
%A D Guillen
%A P Kehoe
%T The Monetary and Fiscal History of Brazil: 1960-2016
%E T Kehoe
%E JP Nicolini
%E T Sargent
%B The Monetary and Fiscal History of Latin America
%D 2018