Prologue to the third letter

Abstract

This note is an attempt at providing a background for understanding some
problems of the negotiations between Brazil and the IMF. The rules of the adjustment game
under the current international economic order are discussed first. Then an evaluation is
made of the role played by the Fund and of its tendency to “overkill” in the drawing of adjustment
programs. Examples of this are provided by an analysis of the second letter of intent
submitted by Brazil to the Fund.

JEL Classification: E31; E60.