The question of stabilization in the 1980s: an institutional approach

Vol. 14 No. 1 (1994)

Jan-Mar / 1994
Published January 1, 1994
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Paulani, Leda Maria. 1994. “The Question of Stabilization in the 1980s: An Institutional Approach”. Brazilian Journal of Political Economy 14 (1):17-27.

The question of stabilization in the 1980s: an institutional approach

Leda Maria Paulani
Do Instituto de Pesquisas Econômicas da Universidade de São Paulo – IPE/USP. São Paulo/SP, Brasil.
Brazilian Journal of Political Economy, Vol. 14 No. 1 (1994), Jan-Mar / 1994, Pages 17-27


This paper deals with the relation between institutions and stabilization problems. Its purposes is to demonstrate that the consideration of the institutions may provide answers for questions that the conventional macroeconomic analysis have not been succeeding in. The main questions is: why, in Brazil, from the beginning of the eighties onward, the inflation rate does not fall to a civilized levels but does not go to a hyperinflationary process? The approach is that provided by the “New Institutional Economics” (NIE) and the tentative hypothesis is that the formal indexation — a allocative institution created by the military government — (PAEG, 1967) — would have displaced the constitutive and fundamental institution, i. e, the money, the official currency. As a result of this process — a different process within Latin America because of the official and legal sign of the Brazilian indexation —, the recurrent rise of prices would have transformed itself into an institution.

JEL Classification: E31; E51.

Keywords: Stabilization indexation inflation money supply