Planet Money SUMMER SCHOOL 4: Inflation & Drinking Buddies
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Aug 4, 2022 Luigi Zingales, a prominent economics expert, dives into the fascinating world of inflation and its real-life consequences. He shares the gripping story of Brazil's struggle with hyperinflation in the 90s, marked by supermarket chaos and economic despair. Zingales highlights the role of psychology in inflation, explaining how consumer expectations can exacerbate the crisis. He recounts how four drinking buddies developed an innovative currency solution, showing that even in dire circumstances, creative thinking can pave the way for recovery.
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Textile Pricing
- Isaac Guerkman, a textile factory owner, used a unique pricing method.
- He'd collude with other textile businesses and base prices on the dollar exchange rate, alongside informal discussions.
Hidden Cattle
- During President Sarney's price freeze, Brazilians hid merchandise like meat.
- Maria Leopoldina Bierenbeck recounts how cattle were hidden, waiting for the freeze to end.
Frozen Accounts
- President Collor froze bank accounts, leading to tragic consequences.
- Many people committed suicide due to the financial distress caused by this decision.