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Canaries and vultures: A quantitative history of monetary mismanagement in Brazil

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  • Albuquerque, Pedro H.
  • Gouvea, Solange

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.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 28 (2009)
Issue (Month): 3 (April)
Pages: 479-495

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Handle: RePEc:eee:jimfin:v:28:y:2009:i:3:p:479-495

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Web page: http://www.elsevier.com/locate/inca/30443

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Keywords: Money demand Money supply Monetary policy Inflation Stabilization Brazil;

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References

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Cited by:
  1. Pedro H. Albuquerque, 2005. "BAD Taxation: Disintermediation and Illiquidity in a Bank Account Debits Tax Model," Public Economics 0511019, EconWPA, revised 27 Nov 2005.

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