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

Guilherme Klein Martins*, Peter Skott

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

5 Citations (Scopus)

Abstract

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.

Original languageEnglish
JournalIndustrial and Corporate Change
Volume30
Issue number2
Pages (from-to)409-444
Number of pages36
ISSN0960-6491
DOIs
Publication statusPublished - 1 Apr 2021

Bibliographical note

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

Keywords

  • E63
  • O14
  • O23

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