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The Monetary Policy Instruments

Brazil's external debt at the beginning of 1994 was equal to 49 percent of GDP.

Over the years, Brazil has implemented several plans and actions intended to solve its ongoing economic and debt problems. All of these plans have been based in monetary policy, and have involved the use of monetary policy instruments (Pang, 1989, pp. 123-140). These plans and actions have ranged from the theoretically complex Crusado Plans to the strikingly simple approach of suspending payments on external debts.

High inflation and large governmental budget deficits (as a proportion of GNP) have long characterized the Brazilian economy (Sola, 1993, p. 40). High rates of development, and, within development, high rates of growth, however, have also characterized the Brazilian economy.

When Ferdinand Collor was elected president of Brazil, the IMF and the governments of the developed countries had found a true economic ally who was willing to try to make Brazil kowtow to the world's international bankers (Sola, 1993, pp. 40-51). Collor's personal scandals might not have led to his impeachment if he had not been seen by the Brazilian public as a tool of international monetary interests.

The initial results of the Crusado Plan in Brazil were spectacular (Pang, 1989, pp. 123-140). The Crusado Plan encountered difficulties in 1987; however, and inflation began to soar. As a consequence, Crusado Two was brought in which

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The Monetary Policy Instruments. (2000, January 01). In LotsofEssays.com. Retrieved 17:09, October 25, 2014, from http://www.collegetermpapers.com/viewpaper/1304085584.html
 
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