Abstract

CUNHA, André Moreira; FERRARI, Andrés  and  FERRARI FILHO, Fernando. The Proposal of Convertibility of the Account of Capital of Brazil and the Argentine Experience. Inv. Econ [online]. 2006, vol.65, n.258, pp.47-84. ISSN 0185-1667.

This paper aims at presenting, in the light of the Convertibility Plan of Argentina in the 1990s, a critical analysis of the Persio Arida´s proposal of adopting currency convertibility in Brazil. The basic idea of the paper is to show that Persio Arida´s proposal, instead of reducing domestic interest rate and exchange rate volatility in Brazil and stabilizing capital flows, as he argues, can bring additionalinstability and, as a result, financial and exchange rate crisis to Brazilian economy. Argentina crisis in 2001 shows it.

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