Canaries and Vultures: A Quantitative History of Monetary Mismanagement in Brazil
AbstractDuring 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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Bibliographic InfoPaper provided by EconWPA in its series Development and Comp Systems with number 0511027.
Length: 34 pages
Date of creation: 23 Nov 2005
Date of revision:
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Money Demand; Money Supply; Monetary Policy; Inflation; Stabilization; Brazil;
Other versions of this item:
- Albuquerque, Pedro H. & Gouvea, Solange, 2009. "Canaries and vultures: A quantitative history of monetary mismanagement in Brazil," Journal of International Money and Finance, Elsevier, vol. 28(3), pages 479-495, April.
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-09 (All new papers)
- NEP-CBA-2005-12-09 (Central Banking)
- NEP-MAC-2005-12-09 (Macroeconomics)
- NEP-MON-2005-12-09 (Monetary Economics)
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