Sources of inflation and the effects of balanced budgets and inflation targeting in developing economies

Guilherme Klein Martins*, Peter Skott

*Kontaktforfatter

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

2 Citationer (Scopus)

Abstrakt

This article presents a model in which distributional conflict and cross-sectoral interactions between demand and supply side forces determine inflation in developing countries. We show that the standard macroeconomic policy recommendations of inflation targeting and balanced budgets (i) increase volatility by amplifying external shocks and (ii) can lead to premature deindustrialization. The recent Brazilian experience is used to illustrate the argument.

OriginalsprogEngelsk
TidsskriftIndustrial and Corporate Change
Vol/bind30
Udgave nummer2
Sider (fra-til)409-444
Antal sider36
ISSN0960-6491
DOI
StatusUdgivet - 1 apr. 2021

Bibliografisk note

Funding Information:
This work was supported by the Chair?s Summer Research Fund from the Department of Economics, University of Massachusetts, Amherst (UMASS).

Publisher Copyright:
© 2021 The Author(s) 2021. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.

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