Inflation in Brazil: characteristics, causes and stabilization program

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[...] Inflation in Brazil: characteristics, causes and stabilization program The Secular Trend of High Prices One of the historical features of the Brazilian economy is the secular upward trend in prices. The periods of rapid change in prices have prevailed over the moderate inflation, especially in the last 50 years. The historical episodes of creeping inflation are all, prior to World War II. Since then, the country has experienced periods of upward spiraling inflation. And the transition from 80 to 90 was very close to a runaway hyperinflation. [...]

[...] Unpopular measures, concomitant with broad program of reforms were adopted. Reformed to the financial system and the tax structure. Each of these factors diagnosed as the cause of the inflationary surge of the previous period. 1698-1979: repressed inflation: The institutional foundations of the previous period were mobilized to the economic miracle combine strong growth with containment of inflation. In the first seven years of the period, the money supply grew twice more than the prices in the last three, this unusual equation was no longer maintained. [...]

[...] The peaks of inflationary increases were not followed by long gradual declines. On the contrary, inflation appears to have become a chronic element in the economic situation, a persistent fever that has challenged the ice packs and economic antibiotics. WORLD INFLATION Important to point out another fact of great significance: inflation has been a global experience. Has plagued developing countries where prices rise, often 20% to 50% per year. And appeared in all industrialized countries, even though these countries have not participated in the wars in Korea and Indochina. [...]

[...] HISTORICAL PERSPECTIVE Inflation is at once a very old and very new problem. If we come to view the history, we find many inflationary periods. In the years following the North American Civil War, the southern United States met fierce inflation, while prices in the North duplicate; during World War prices in the United States returned to double. RECENT EXPERIENCE inflation Once again, we note that the outbreak of war caused high prices. This is because the funding of wars in Korea and Vietnam, just as in the previous great wars, not sufficiently restricted private spending. [...]

[...] The demand for all categories of goods and services, consumption and production, has become exacerbated. 1994-1998: The real, around the orthodoxy and stabilization: The creation of the real in the wake of a major reform in the monetary institutions in the country from the second half of 1994 was the most successful stabilization program of prices in Brazil, the second half of the twentieth century. This was a coin regeneration process in Brazil. The country sought to walk the opposite direction of the one who destroyed. [...]