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The Argentine shock and the Brazilian dilemma

ABSTRACT

The application of the so-called “heterodox shock “ anti-inflation policy in Argentina provoked several discussions about the similarities and differences between Brazilian and Argentine inflation, and the possibility of its application in Brazil. This article attempts to examine some of these questions. The analysis emphasizes the question of the lags in the readjustments of the prices and the contribution of the conversion of prices to the average values of the period for the stability of the new currency; the question of the synchronization of wages and prices increases; and the utilization of conversion tables. Finally, the rate of interest and its relation with the level of economic activity.

KEYWORDS:
Inflation; stabilization

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