The Vargas' second administration (1951-54) and Goulart's administration (1961-64) are considered typical examples of populism in Brazil. Because of the political problems both presidents had to face, the literature usually defines their economic policies as "hesitating", "irrational" or "ambiguous". However, the analysis of the two periods indicates that there is a pattern in the way economic policies were conducted, which can be understood as a result of an equilibrium strategy in a model of credibility. The governments started with measures to fight against inflation that improved the credibility of the economic policies. As time goes on, though, the policies were random, alternating measures pro and against stabilization. Later, as a result of the costs associated with the policies, they abandoned the austerity and, in consequence, the credibility decreased and the attempts of stabilization failed.
