Jump to ContentJump to Main Navigation
Playing Monopoly with the DevilDollarization and Domestic Currencies in Developing Countries$
Users without a subscription are not able to see the full content.

Manuel Hinds

Print publication date: 2006

Print ISBN-13: 9780300113303

Published to Yale Scholarship Online: October 2013

DOI: 10.12987/yale/9780300113303.001.0001

Show Summary Details
Page of

PRINTED FROM YALE SCHOLARSHIP ONLINE (www.yale.universitypressscholarship.com). (c) Copyright Yale University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in YSO for personal use.date: 17 May 2022

The Costs of Stability

The Costs of Stability

(p.82) Chapter 4 The Costs of Stability
Playing Monopoly with the Devil

Manuel Hinds

Yale University Press

This chapter focuses on the issue of currency stability by analyzing the economy of Brazil. It discusses how the instability in Brazil is largely attributable to the increasing complexity of the monetary quagmire that the government has created to keep its currency stable. If the interest rates that the government pays were close to the international levels, the fiscal deficits would disappear. Since they are so high, the government has a deficit. Then, the deficits lead to the need to print money to finance the government, and money printing creates the need to devalue the currency. The analysis presented in the chapter shows that the costs of keeping Brazil's monetary independence, in the sense of severing the linkage between devaluation and inflation, are staggering. Rather than freeing the country from the external environment, the monetary system has trapped it in a vicious circle of dependence on international capital flows.

Keywords:   currency stability, economy of Brazil, monetary quagmire, fiscal deficits, money printing

Yale Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us.