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Economists say the inflation target could increase social inequality.

Economists say the inflation target could increase social inequality.

That salary they earn will no longer be enough to buy what is necessary, unlike the scenario of a part of society that manages to save money, that does not spend everything they earn, because these people have some kind of reserve, perhaps they will continue to consume what they have already consumed.
Juliana Inhas, Economist and Professor at Insper (Institute for Teaching and Research)

Uncontrolled inflation also leads to inequality. “When inflation is under control, even though credit is more expensive, people are able to afford their living expenses. It’s a different situation than when inflation runs rampant and low-income people lose their ability to buy,” the economist says.

Inflation Target: What is its purpose?

The inflation target forms part of the macroeconomic tripod that guides economic policy in Brazil. “It consists of inflation targets, a variable exchange rate and a primary surplus. This tripod is used to ensure stability and credibility for the private sector, and to encourage investments in the short and long term,” explains economist and professor at the Federal University of South and South-East of Pará (Unifesspa) Giliade de Souza Silva.

This policy was led by economist Arminio Fraga, who was appointed head of the Central Bank in 1999. However, it is not the only one capable of achieving the desired results of investor confidence and economic stability.

We have set an inflation targeting regime that I think has been beneficial to the country, and I hope it will be maintained.
Pedro Malan, former finance minister and central bank governor during the implementation of the real plan In an interview with Folha de S. Paulo.

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