The Inflation-Stabilization Cycles in Argentina and Brazil

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The Inflation-Stabilization Cycles in Argentina and Brazil

Kiguel & Liviatan, 1990.

The repeated use of price and wage controls is likely to destabilize inflation in the medium run. The similar cyclical pattern of inflation observed in the aftermath of the failures of the Austral plan in Argentina and the Cruzado plan in Brazil is mostly linked to anticipations about the introduction of price controls. The heterodox approach is risky if not accompanied by an adequate adjustment in the budget deficit.