Suchergebnisse

This paper is an account of the intellectual process that led, in the early 1980s, to the definition of the new economic theory of inertial inflation, which is identified as the consequence of phased or staggered price adjustments. Economic agents are involved in an endless process of balancing and unbalancing relative prices, as they keep up with the ongoing inflation. To fight inertial inflation, orthodox or conventional fiscal and monetary policies are insufficient. In addition it is necessary to adopt a heterodox mechanism that neutralizes inertia. This article is part of a book in preparation where the author reports his experience as minister of finance in Brazil in 1987. (Rev Econ Polit/DÜI)