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

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Author Info

  • Pedro H. Albuquerque

    (Texas A&M International University)

  • Solange Gouvea

    (Central Bank of Brazil)

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. The consistency between the money supply and the expected conditional money demand growth rates is considered for each plan. It is shown that the unsuccessful programs were marked by excessive liquidity. The results not only suggest that the mismanagement of the monetary aggregates led to the failure of the plans, but also that the excessive liquidity could have been predicted.

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File URL: http://128.118.178.162/eps/dev/papers/0511/0511027.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0511027.

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Length: 34 pages
Date of creation: 23 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0511027

Note: Type of Document - pdf; pages: 34
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Web page: http://128.118.178.162

Related research

Keywords: Money Demand; Money Supply; Monetary Policy; Inflation; Stabilization; Brazil;

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References

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Cited by:
  1. Pedro Albuquerque, 2006. "BAD taxation: Disintermediation and illiquidity in a bank account debits tax model," International Tax and Public Finance, Springer, vol. 13(5), pages 601-624, September.

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