The paper analyses the relationships among inflation, inflationary tax and public deficit for the Brazilian economy during the eighties. Initially, these relationships are described somehow simplistically using the so-called inflation tax model. The working hypothesis are (1) there is an absolute limit to government’s deficit financing by inflationary tax; (2) a given amount of inflationary tax can be collected at either high or low rate of inflation and (3) the inflationary tax collected by the government depend on the monetary conditions of the economy. Using this analytical framework a simulations exercise is carried out to estimate the inflation-tax finance of the public deficit for the Brazilian economy during the period 1982-88. The main conclusions are: (1) the conditions of the inflationary tax finance change after 1986, when the focus of the economic policy shifts from the conventional orthodoxy to what is called heterodox approach; (2) the accelerating inflation has radiply weakened the ability of the government to collect inflationary tax and (3) under these conditions price freezes and exchange rate fixing may be considered necessary to ensure a transition from a high to a low level of inflation.

This paper discusses why inflation is so high in Latin America and what can be done to stop it. The first part starts with an analysis of monetarism. It also discusses seignorage models, the impact of the debt crisis and of dollarization on inflation. Next we review structuralism and its most recent insight: inflation inertia. Then we integrate the different interpretations of inflation. The second part examines stabilization programs, beginning with the analysis of programs derived from the monetarist diagnose, or orthodox programs. Next we turn to heterodox programs, including both populist programs and programs based on a new interpretation of inflation. The stabilization programs of the 1980s failed to obtain budget consolidation and large budget deficits have pushed the economy into a classic inflationary finance situation.

This text begins by exploring the Japanese Model of industrial relations and organization as an alternative to the crisis of fordism-taylorism occurring in Eastern Developed Countries.. Acknowledges for such, the importance of improved capital-labour relations, i.e., workers’ participation in the definitions and in the benefits of common objectives that results for example in better income distribution. Taking the Brazilian case it is diagnosed that the present model of “development” is leading the country to chaos. Radical economic, social and political changes are required to recreate a contemporary model of capitalist development based on Brazilian specifi-cies. In such model social welfare is one of its major economic strengths, a genuine international competitiveness will naturally result from the strengthening of the internal market and labour is not merely considered a cost of production but an important resource for building dynamic comparative advantages.

The aim of this paper presented at the National Accounts Seminar that took place in Buenos Aires, Argentina, November 1988, is to defend the viewpoint that, in the same way as the amortizations payments don’t represent part of the public sector debt, the monetary correction of the debt and other similar charges shouldn’t be con-sidered as part of this deficit. This assertion should be even more emphasized in the case of countries with high inflation rates where expenditures with monetary indexation and other similar charges became, progressively, a bigger share of the Gross Domestic Product. Regarding to a better understanding of the Government real financial situation, an adjustment was done at the national accounts series. In this sense, and in order to work out the fiscal policy, the amount corresponding to the monetary correction was excluded from the expenditure of domestic debt charges. This meant that mone-tary indexation in a context of high inflation rates is better classified as principal rather than debt charge. It is important to note that this paper is based on a previous one, also by Sílvio Rodrigues Alves, entitled “O Desafio do Deficit Público”, published in Revista de Economia Política n.0 30 (April-June/1988). Afterwards, in June 1988, the same viewpoint was defended by Mr. Blezer, Mr. Tanzi and Mr. Teijeiro in the paper “The Effects of Inflation on the Measurement of Fiscal Deficits” (Occasional Paper 59, International Monetary Fund, Washington, D.C., June 1988).

In the solution of the “transformation problem”, Marx erred in believing that the profit rate determined in the value system was the mediation between values and production prices. This error invalidates Marx’s “doble postulate”, according to which the sum of values equals the sum of prices and the sum of surplus value equals the sum of profits. By using a linear operator from the value system, it is possible to fully determine the average profit rate and the system of production prices. In this way, we can preserve Marx’s fundamental epistemological postulate, according to which the realm of essence (values) determines the realm of transparent reality (prices).

In the center of present crisis of Brazilian economy and society is the crisis of the State. To understand this crisis this paper makes a revision of the nature and the role of the Brazilian State in the present and in the past. The paper agues that in the peripheral capitalism, like Brazilian, the State has played different roles and has produced different effects as compared to the State of developed countries. Here the State is not only an essential and fundamental component of the process of capital accumulation, but has difficult to play the role of arbiter of class conflicts and competition between different interest groups. Among other things, the nature of the Brazilian State has produced and reproduced increasing inequality structural heterogeneity.

The present wave of privatization and the relative success of the neoliberal criticism against the economic role of the state are part of the cyclical character of state intervention. We are now in the downturn of the cycle. During the upturn state intervention, measured in terms of nationalization’s and increase in regulation, is initially successful, but after some time it runs in increasing distortions. The crisis and the criticism that come with the distortions lead to a reduction and particularly to a change in the pattern of state intervention. But never to a return to I’Etat gendarme dreamed by neoliberals.

Este trabalho pretende resituar a teoria da demanda efetiva num contexto de não-equilíbrio dinâmico. As teorias de demanda efetiva derivadas dos trabalhos de Keynes e Kalecki estão geralmente inseridas num equilíbrio estático de oferta e demanda agregada. Propomo-nos generalizar esta análise de três formas. Primeira-mente estendendo a análise de maneira a englobar a trajetória dinâmica de curto prazo da produção. Em segundo lugar, mostrando que esta trajetória dinâmica de curto prazo não implica numa análise de equilíbrio, pois pode surgir tanto de ciclos sustentados estocasticamente como de ciclos limite-determinísticos. Em terceiro lugar, mostraremos que a generalização anterior da teoria de demanda efetiva nos permi-tirá resolver uma antiga questão da teoria do crescimento: as dificuldades em torno da aparente intratabilidade da instabilidade da taxa garantida de crescimento. Mos-traremos que a trajetória de crescimento gravita em torno da taxa de crescimento garantido de forma cíclica.