This paper uses the Fischer equation and Olivera-Tanzi effect to insulate the
inflationary endogeneity existing in Argentine public deficit. The outcome is a fiscal policy
discretionary measure known as zero inflation budget. Through this measure we examine if
the deficit reflects countercyclical policies or populist consumption targets.
JEL Classification: E32; E62.
The purpose of this paper is to evaluate the possibilities of natural gas import
from Argentina or Bolivia to Brazil. It is possible to verify the existence of a consumption
market that may become the importation of gas attractive. More than a simple trade deal,
the construction of a gas duct may help to improve the existence of a future common market:
JEL Classification: F15; F13; Q41.
This paper presents, in its first section, the available evidence regarding the evolution
of the inter-state and inter-regional distribution of income in Brazil, between the years
1970 and 1985. The main conclusion is that a clear trend towards convergence of the state
and regional per capital incomes prevailed in the aforementioned period. In section 2, some
explanations are advanced for the observed trend, whereas, in the final section, a discussion
is made of the prospects that the convergence of per capita incomes has been maintained in
the post-1985 period, for which data are not available, and will continue to prevail in the
JEL Classification: O47; R10.
This paper examines the occurrence of “triangular trade schemes” in the export
of fine chemical products to Brazil from other Mercosur countries between 1989 and 1992
and suggests possible government counter measures. It is shown that the sudden increase
in Brazilian imports of fine chemicals from Uruguay corresponds to a “triangular” trade
scheme between both countries and a third party and suggests the adoption of more precise
origin rules than those agreed during recent Mercosur negotiations, allowing the gains from
integration to accrue mainly to the member countries.
JEL Classification: F15; F13; L65.
This article resumes the author’s Ph.D. thesis main aspects and results. It presents
an algorithm which enables one to measure sectorial mark-ups variations not using
accounting data from firms. That instrument has the capability of discounting the impact of
variations in relative prices and in productivity for inputs, from the variation of final prices
of sector. The testing of the algorithm revealed a clear positive correlation between mark-up
variations and degree of industrial concentration, higher and more significant in the recession
period (1980-1983) than in the growth one (1977-1980).
JEL Classification: E31; C67.
Based on the disaggregation of the private sector as an amplification of the well-
-known Barro & Gordon policy-game model, a coordination and/or cooperation problem
of the price-setters in the private sector is identified as a possible cause for the persistence
of inflation even during stabilization efforts. This kind of persistence is, at least in the short-
-term, independent from the willingness of the government to stop inflation. A process of
self-fulfilling prophecies is started by the “wait-and-see” behavior of private sector’s price-
-setters, which can result in the giving up of the stabilization policy. Breaking this “wait-and-
-see” behavior could be one of the major problems in stabilizing economies with chronic
JEL Classification: E31; C70.
This note analyzes, based on a simple model, the contribution of three authors
(Rodriguez, Meltzer and Auerheimer) to the debate on inflation in Brazil and ways to overcome
it. The hypothesis of adopting a currency board regime, as suggested by the three
authors, and its implications for Brazil are discussed in more detail. As an alternative, it
is suggested to adopt a monetary regime inspired by Hayek, in which there is competition
between private banks for the issue of currency.
JEL Classification: E42; E51; E52.
Shock therapy was used in Poland causing many problems. It is true that four
years later the economy started to grow again, but the transition to the market economy
took place with high unemployment rates and increasing social inequalities. Poland’s liberalization
and economic stabilization program has a lot to do with similar programs experienced
in Latin America and could be useful to Poland. In the short term, costs are similar
to those of the Latin American experience. Even though stabilization was partially achieved,
the social costs that took off were large, making the continuation of economic reform politically
indigestible in the democratic context.
JEL Classification: P21; P52.
Orthodox conventional wisdom related to monetary policy in the 1990s presents
the independence of central banks as a condition for achieving durable price stability, as it did
with respect to the adoption of fixed rules for monetary growth in the 1980s. The paper proceeds
to a critical examination of the arguments, in which it is concluded that, besides the undesirable
political implications of the proposal, the thesis is too dependent on specious and fragile
concepts as the natural rate of unemployment and the allegedly inherent inflationary bias
of monetary authorities as well as on a very narrow view of the role of monetary authorities.
JEL Classification: E58; E52.
This note presents a situation in which the government surprises rational agents
by implementing an anti-inflation policy in place of one that fights against recession. As a
result, a pressure towards the balance of payments superavit is obtained during the impact
period. That conclusion stems from the surprise of the new government policy under a “leaning
against the wind” policy regime.
JEL Classification: F32; F62.
Em 28 de maio de 1995 o caderno Mais! da Folha de S.Paulo publicou a conferência que o Presidente da República, Fernando Henrique Cardoso, pronunciou em Washington no início do mês, "Desenvolvimento: o mais político dos temas econômicos", antecedido de uma introdução escrita especialmente para o jornal. Pela importância do texto, publicamo-lo em nossa seção de Documentos.