Was there an alternative to the brasilian crisis?
By: KREGEL, Jan A
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Material type: 
ArticlePublisher: São Paulo : Editora 34 , jul./set. 1999Revista de Economia Política = Brazilian Journal of Political Economy 19, 3, p. 23-38Abstract: In difference from Asia, high interest rates and stable exchange rates associated with the Real Plan did not produce a corporate debt deflation because of the low corporate indebtedness in Brazil. Instead high interest rates caused both the foreign and fiscal balances to deteriorate, reducing confidence. Any attempt to reduce interest rates brought the threat of currency weakness and the risk of inflation. The crisis was due to the reliance on high interest rates to attract capital flows which were insufficient to produce investment which gave a satisfactory rate of growth
In difference from Asia, high interest rates and stable exchange rates associated with the Real Plan did not produce a corporate debt deflation because of the low corporate indebtedness in Brazil. Instead high interest rates caused both the foreign and fiscal balances to deteriorate, reducing confidence. Any attempt to reduce interest rates brought the threat of currency weakness and the risk of inflation. The crisis was due to the reliance on high interest rates to attract capital flows which were insufficient to produce investment which gave a satisfactory rate of growth
Revista de Economía Política 1999
v. 19, n. 3(75)
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