Inflação, taxas de câmbio e estabilização

Abstract

This essay considers the role which exchange rates play in the context of inflation stabilization. Four different settings are used to highlight that role: the experiments with exchange rate overvaluation in the Southern Cone; the place of exchange depreciation in the transition from high to even higher inflation discussed in the context of Brazil; exchange rate fixing and real appreciation during Germany stabilization in the 1920s; and finally the U. S. real appreciation of 1980185. The common thread of the argument is that exchange rate policy can make en important contribution to stabilization, but that it can also be malpracticed leading to persistent deviations from Purchase Power Parity, with devastatingly adverse effects.