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

Listed author(s):
  • Pedro Albuquerque

    ()

    (Euromed Marseille - École de management - Association Euromed Management - Marseille, DEFI - Centre de recherche en développement économique et finance internationale - Université de la Méditerranée - Aix-Marseille 2 - Faculté des Sciences Economiques)

  • Solange Gouvea

    (DEPEP - Departamento de Estudos e Pesquisas - Banco Central do Brasil)

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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Paper provided by HAL in its series Post-Print with number halshs-00746537.

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Date of creation: Apr 2009
Publication status: Published in Journal of International Money and Finance, Elsevier, 2009, 28 (3), pp.479-495. <10.1016/j.jimonfin.2008.12.005>
Handle: RePEc:hal:journl:halshs-00746537
DOI: 10.1016/j.jimonfin.2008.12.005
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00746537
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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