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Distribution and Conflict Inflation in Brazil under Inflation Targeting, 1999–2014

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  • Ricardo Summa
  • Franklin Serrano

Abstract

In this paper, we analyze Brazilian inflation under the inflation-targeting system from a conflict inflation perspective and show how the inflation target system only worked well when there was a trend of exchange rate appreciation. Later, the strengthening of the bargaining power of workers and rising real wages since 2006, combined with continuous nominal exchange rate depreciation after mid-2011, increased distributive conflicts and are ultimately behind the recent shift toward austerity.

Suggested Citation

  • Ricardo Summa & Franklin Serrano, 2018. "Distribution and Conflict Inflation in Brazil under Inflation Targeting, 1999–2014," Review of Radical Political Economics, Union for Radical Political Economics, vol. 50(2), pages 349-369, June.
    • Handle: RePEc:sae:reorpe:v:50:y:2018:i:2:p:349-369
    DOI: 10.1177/0486613417691787
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    References listed on IDEAS

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    1. Blanchflower, David G. & Oswald, Andrew J., 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute of Labor Economics (IZA).
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    3. Antonella Stirati, 1994. "THE THEORY OF WAGES IN CLASSICAL ECONOmiCS," Books, Edward Elgar Publishing, number 417, March.
    4. Marc Lavoie, 2014. "Post-Keynesian Economics: New Foundations," Post-Print hal-01343652, HAL.
    5. Rowthorn, R E, 1977. "Conflict, Inflation and Money," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 1(3), pages 215-239, September.
    6. Antonella Stirati, 2001. "Inflation, Unemployment and Hysteresis: An alternative view," Review of Political Economy, Taylor & Francis Journals, vol. 13(4), pages 427-451.
    7. Ricardo Summa, 2016. "An alternative model to the open-economy "new consensus" for the analysis of inflation targeting," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 17(3), pages 310-323.
    8. Franklin Serrano & Ricardo Summa, 2015. "Mundell–Fleming without the LM curve: the exogenous interest rate in an open economy," Review of Keynesian Economics, Edward Elgar Publishing, vol. 3(2), pages 248-268, April.
    9. Michal Kalecki, 1971. "Class Struggle And The Distribution Of National Income," Kyklos, Wiley Blackwell, vol. 24(1), pages 1-9, February.
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    More about this item

    Keywords

    conflict inflation; inflation target system; functional income distribution; Brazilian economy;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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