The resurgence of inflation in Brazil, 1974-1986

This paper examines various factors which contributed to the resurgence of inflation in Brazil in the 1970s and 1980s, and the reasons for the failure of ortodox austerity programs to control it. The evidence seems to black the school of thought which considers the best explanation for the recent inflationary experience to lie with the spread of formal and informal indexing, leading to an inertial type of inflation. The latter has led some economists to recommend heterodox methods of inflation control. An epilogue briefly describes Brazil's recent attempt to apply such methods.