Brazil faced many struggles with its currency throughout the last half century, eventually changing its currency five times before reaching what most would argue was their best stabilization plan. The stabilization plan that Brazil concluded with and is currently practicing is known as the Real. Each of the five currencies mentioned lasted at most three years, however since the creation of the Real Plan, the Real has been used for over twenty years. Compared to each of its predecessors, the Real Plan can easily be considered the most successful strategy followed by the Brasilian government. The Real was mainly able to achieve its fame by being able to keep inflation rates stabilized and lower over the past twenty years.
What exactly was the Real Plan? The Real Plan was essentially a framework created and implented by Itamar Franco and Fernando Henrique Cardoso. According to Filho, Franco and Cardoso determined that Brazil’s economic issues lied with its inflation rate. Therefore, they set forth to create a policy where they could stabilize and control the inflation rate, the aftermath was known as the Real Plan. As Filho puts it, this was possible by following three steps: first off they had to adjust the short-term fiscal deficit, then monetary authorities had to introduce a price index to stabilize the economy, and finally the real would be introduced as legal tender. Unlike the other stabilization plans, what made the Real different, were the steps used in introducing this new plan. Cardoso and Franco saw the issues of bringing about a new currency into the Brasilian economy, and therefore they preemptively created these three steps in order to make the plan successful. The results of the steps linked to eachother and allow...
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... of Finance & Economics 7.1 (2002): 15-35. Print.
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Globalisation has been crucial to the economic and social development of Brazil. In the late twentieth century Brazil face years of economic, political and social instability experiencing high inflation, high income inequality and rapidly growing poverty. However after a change of government in the 1990s and large structural changes in both the economic and social landscapes, the brazilian economy has been experiencing a growing middle class and reduced income gap. Since the start of the 21st century, brazil has benefitted from the move to a more global economy.
Larry Rohter was a journalist in Brazil for 14 years and from his experiences he offers in this book some unique insights into Brazilian history, politics, culture and more. In 10 topical chapters Rohter’s easy-to-read book provides a look at Brazilian history and the extraordinary changes the country has undergone -- and is still undergoing. Rother covers many significant issues, but several stand out more than others. Namely: the country’s history, culture, politics, and finally its economy/natural wealth.
The Realm of Desire and Dream: Brazil and its Self-Constructing Middle Class of the 1980s, 1990s and Today
Filh, Alfredo Saad. "Neoliberalism, Democracy, and Development Policy in Brazil." DEVELOPMENT AND SOCIETY June 2010: 1-28.
Belsie, Laurent. “The Causes of Rising Income Inequality.”.N.p., 5 Mar. 2009. Web. 30 Apr. 2014
Introduction Brazil is the largest and most populous country in South America. It is the 5th largest country worldwide in terms of both areas (more than 8.5 Mio. km2) and inhabitants (appr. 190 million).
Brazil is a vast country in South America that has experienced extreme wealth and income disparities since its independence in 1822. The uneven income distribution, combined with several other factors, is what accounts for millions of civilians living in impoverished conditions. The Northeast is the country’s most afflicted region, with an estimated 58% of the population living in poverty and earing less than $2 a day. The systemic inequality as well as lack of development and modernization has generated chronic poverty that has had detrimental effects on society in northeast and ultimately weakens Brazil.
Przeworski, A., 2004. Capitalism, Development and Democracy. Brazilian Journal of Political Economy, Vol. 24, No. 4 (96), Pp. 489-497
Income inequality in the United States, as of 2007, has reached levels not seen since 1928. In 1928, the top one percent received nearly 24% of all income within the United States (Volscho & Kelly, 2012). This percentage fell to nearly nine percent in 1975, but has risen to 23.5% as of 2007 (Volscho & Kelly, 2012). Meanwhile, in 2007 (see
“A Guide to Statistics on Historical Trends in Income Inequality.” cbpp.org. Center on Budget and Policy Priorities, 2013. Web. 06 April. 2014. .
Brazil has many developmental goals they have hoped to attain. Economic policy since the late 1960s has had three prime objectives: control of inflation, gradual improvement of the welfare of the poorest sector, and a high economic growth rate (Encyclopedia of Nations). Also there are the Millennium Development Goals set out by the United Nations to developing countries, such as, reducing poverty, increase education gender equality, reduce child mortality and improve maternal health, combat diseases, ensure environmental sustainability, and devel...
The plan caused prices throughout the nation to be adjusted on a daily basis according to price indices and the exchange rate in comparison to the US dollar. The currency of the Plan was called the Unidade Real de Valor or “URV” for short, and it was worth about $1 US (Joffe-Walt).... ... middle of paper ... ...
Banerjee, A., Duflo, E. (2003), Inequality and Growth: What Can the Data Say?, Journal of Economic Growth, 8(3), Pp. 267-299
Pinheiro P. S., 2002, The Paradox of Democracy in Brazil vol. III, issue 1, University of Sao Paulo
Stewart, Charles T., Jr. "Inequality of Wealth and Income in a Technologically Advanced Society." The Journal of Social, Political, and Economic Studies 27.4 (2002): 495-512. Print.