Publication Date

1-1-2004

Document Type

Dissertation/Thesis

First Advisor

Mohabbat, Khan A.

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Economics

Abstract

The macroeconomic policies undertaken by Brazilian policymakers during the 60’s, 70’s, 80’s, and 90’s—namely high growth of money supply, huge budget deficits, and the excessive use of inflation tax—created an inflation crisis comparable to Germany’s hyperinflationary period. Consequently, the effects of high inflation on different Brazilian economic variables have become interesting and challenging subjects to macroeconomists. This paper attempts to describe the effect of high inflation on output in Brazil between 1975 and 2002. By running a simple linear regression model, I find that, unlike many other studies, there is a positive relationship between inflation and output in Brazil during this period. More specifically, the results suggest that a 1% increase in average inflation produces a 0.0066% increase in output. This result is possible due to the Brazilian government’s use of inflation to promote growth (Tobin Effect). Furthermore, this action by the government is responsible for the enormous income inequality found in Brazil.

Comments

Includes bibliographical references.

Extent

41 pages

Language

eng

Publisher

Northern Illinois University

Rights Statement

In Copyright

Rights Statement 2

NIU theses are protected by copyright. They may be viewed from Huskie Commons for any purpose, but reproduction or distribution in any format is prohibited without the written permission of the authors.

Media Type

Text

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