Estrategias de estabilizacao: Peru

Written just before the inauguration of the new president of Peru, Alberto Fujimori, this article comments the necessity to banish populism and take emergency measures, together with a long-run programme, in order to obtain an effective stabilization of the economy. It emphasizes what could be considered consensus among the economists from countries that have experienced chronic inflation: equilibrium of budget deficit, shock therapy, incentives in income policy. It is concluded that in spite of adjustment costs, the less privileged classes will suffer much less by such measures than in continuous inflationary constraints