Credibility and populism: the economic policy of the Goulart administrations in Brazil

the goulart administrations (1961-1964), which consisted of a parliamentary period and a presidential period, are considered typical examples of populism in brazil. the literature usually defines economic policies advanced by these administrations as "he-sitating", "irrational" or "ambiguous." we use a credibility model to argue that there is actually a consistent pattern in the manner in which economic policy was conducted. the credibility of the economic policies is defined to be the subjective probability that the government is following a monetary rule. early on, the administrations enacted inflation-fighting measures. however, these policies were costly, and the administrations abandoned the course of austerity. as a result, their credibility was diminished, and attempts to achieve stabilization failed.