BRAZILIAN INFLATION FROM 1980 TO 1993 - CAUSES, CONSEQUENCES AND DYNAMICS

This article focuses on Brazilian inflation: its causes, consequences and dynamics from 1980 to 1993. We argue that the main economic cause of the Brazilian inflation was the excessive growth of money, in turn caused by too high budget deficits. Oil and exchange rate shocks also played a role, together with the greater dependence of the Central Ban k of Brazil on the government. We measure the degree of Central Bank i ndependence by the variable 'turnover' of Central Bank governors defin ed as the number of months in office. The effect of this variable on i nflation is found to be highly significant and positive.