Economics and Politics in Plano Real

Abstract

This paper reviews the political and theoretical developments that lead to the
Real Plan. First, the importance of the discovery of inertial inflation is discussed. Secondly,
the impact of the choice of Fernando Henrique Cardoso for the Ministry of the Economy.
Then, the conditions for the implementation of the URV and the reasons for the superiority
of the plan in comparison to the previous attempts of stabilization of Brazilian economy.

JEL Classification: E31; E52; E58.