The revenue and the inflation: an interpretation of the Brazilian case

Vol. 14 No. 1 (1994)

Jan-Mar / 1994
Published January 1, 1994
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Bacha, Edmar Lisboa. 1994. “The Revenue and the Inflation: An Interpretation of the Brazilian Case”. Brazilian Journal of Political Economy 14 (1):1-16. https://doi.org/10.1590/0101-31571994-0799.
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The revenue and the inflation: an interpretation of the Brazilian case

Edmar Lisboa Bacha
Assessor especial do Ministro da Fazenda e professor titular licenciado do Departamento de Economia da Pontifícia Universidade Católica do Rio de Janeiro/RJ, Brasil.
Brazilian Journal of Political Economy, Vol. 14 No. 1 (1994), Jan-Mar / 1994, Pages 1-16

Abstract

Available “fundamentalist” interpretations of Brazilian inflation seem unable to
explain why Brazil has such high rate of inflation with such a small public sector operational
deficit. An attempt is made to explain this paradox with the use of the concepts of potential
deficit with zero inflation and the inflationary erosion of budgeted government expenses.
The conclusion is that the resolution of the Brazilian inflationary conflict involves the transfer,
to local governments or the private sector, of a significant share of the current functions
of the federal government.

JEL Classification: E31; H30.


Keywords: Inflation public expenditure stabilization