3min chapter

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SUMMER SCHOOL 4: Inflation & Drinking Buddies

Planet Money

CHAPTER

The Best Person to Talk to on Inflation

Inflation continued for the next five decades in brazil. President sarney's solution to inflation was simple. Businesses are in prices. Make that illegal. There was a price freez and you know what happened? People hid the merchandise, because they wanted the price still to grow up. The main problem with this plan is you can't just freeze prices and not deal with the underlying problem of creating money which causes inflation. That was the next guy's idea, president coller, in 19 90. He thought, ok, i'll just stop creating so much money. Inflation will eventually go down. Now here is the problem with that.

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