ABSTRACT
Inflation has become, in the 80’s, the most important barrier to resuming economic growth in Brazil. A post-Keynesian approach to this problem stresses the effects that continuing high inflation has on beliefs and institutions, especially the system of money forward contracts that is fundamental to organize and coordinate an entrepreneurial economy. A High Inflation Regime is defined by the introduction of new monies-of-account for forward contracts, that is, indexation, and by a change in the modes of price formation. It is shown that High Inflation characterizes an unstable equilibrium that may degenerate into hyperinflation. The permanence of high inflation, however, may engender stagnating tendencies.
KEYWORDS:
Inflation