The Conceptual Evolution of Inflation Inertia in Post-Stabilization Brazil (1994-2014)

The paper aims at outlining such conceptual change with a brief account of pre-Real Plan stances on inflationary inertia and contrasts them against the general opinion on the matter in more recent times. The literature has been largely silent about the conceptual gap between the stabilization debates carried out in the 1980s and the way economists in Brazil began to describe downwardly rigid inflation patterns from the 1990s onwards. We assess how “inflation inertia” has been understood in the immediate aftermath of the monetary reform in Brazil in 1994, by analyzing the backstage papers that circulated within the economic team in charge of stabilizing the economy. Finally, we provide a narrative accounting for elements of both rupture and continuity between the two “conceptual moments” of inertia, a decisive trait of which is a stripping down of historical and institutional substance underlying the conceptual framework