Some stylized facts on external shocks and inflation upsurge in Brazil, 1951-1985

Alguns fatos estilizados sobre choques externos e surtos inflacionários no Brasil, 1951-1985

Abstract

This paper studies the episodes of inflation upsurge in Brazil from 1951 to 1985, a period wherein Brazilian inflation rates were among the highest in the world. It identifies the episodes of inflation upsurge within this period and analyzes whether they were concomitant with and/or preceded by some type of external shock (exchange rate devaluations and/or commodity price shocks). Based on this relationship this paper identifies eight episodes of inflation upsurge and shows that seven out of these eight episodes followed such pattern. We show also that such analysis is strongly associated with the traditional structuralist Latin American inflation theory.

Key words:
Brazil; cost-push inflation; external shocks