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Epilogue to Part I: Circumstances and Institutions: Notes on Monetary Policy in Brazil in the Last Fourteen Years

Epilogue to Part I: Circumstances and Institutions: Notes on Monetary Policy in Brazil in the Last Fourteen Years

Chapter:
(p.149) Epilogue to Part I: Circumstances and Institutions: Notes on Monetary Policy in Brazil in the Last Fourteen Years
Source:
Latin American Macroeconomic Reforms
Author(s):
Gustavo H.B. Franco
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226302683.003.0005

Brazilian policymakers are entering the seventh year of the Real Plan, an effort ending a hyperinflation process that lasted a little more than seven years. This chapter goes back in time for exactly fourteen years in order to observe as much time under hyperinflation as after its extermination, and is divided into three sections. The first considers the 1986 landscape, the impact of the 1988 constitution, and the slide into hyperinflation. Considerable attention is devoted to the workings of the central bank during these exceptional years. The second section deals with the stabilization and the changes introduced as regards practices and institutions by the 1994 monetary reform. The first years of stabilization were made especially sensitive by the very delicate situation of the banking system. Finally, the third section considers the monetary policy reaction to the external crises following the Thai devaluation and the switch to floating exchange rates with an inflation-targeting regime.

Keywords:   hyperinflation, monetary policy, 1988 constitution, stabilization, monetary reform, Thai devaluation, floating exchange rates

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