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Brazil Inflation and Indexation Cycle

By Amy Skalmusky, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL - In the late 1980s and early 1990s inflation in Brazil reached out-of-control levels and many people lost their savings, homes and jobs. One of the economic measures introduced to combat hyper inflation, price indexing, is still around today and many experts believe it a dangerous relic that should be scrapped.

In the past, with inflation reaching around 2,000 to 3,000 percent a year during the Eighties and Nineties crisis, the price indexing was an attempt to maintain people's buying power.

Not only salaries, but the . . .

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