ABSTRACT
This article makes a classification of inflation processes. Moderate inflation is a phenomenon represented by Phillip’s Curve. In chronic inflation, inertial and backward-looking indexation are major factors. Hyperinflation eliminates backward-looking indexation and is dominated by expectation and the public factor financial difficulties. It is argued that although the public inflation factor deficit is not always the primary cause of chronic inflation, in later stages no government deficit whatsoever can be financed. The lack of alL sources of public factor financing is what characterizes the transition to hyperinflation. The current Brazilian scene is analysed.
KEYWORDS:
Inflation; hyperinflation; monetary policy