Abstract

Severe recessions usually occur in the company of deflation. However, Brazil displayed atypical results in 2015, with a severe recession and double-digit inflation at the same time. Fisher delivered the classical explanation for severe recession and dramatic price level variation. Inspired by Fisher’s model, we elaborated on an explanation for the case of Brazil. The country displayed the essential elements of Fisher’s model: debt disturbances and price-level disturbances. A contractionary fiscal policy triggered the recession, and once contraction started, the price level moved upwards dramatically. Among the government’s spending cuts were subsidies to intermediate inputs. Once the prices of these inputs increased, the general price level followed. In the presence of a recession, nonfinancial corporations saw their costs soar. As a result, they could not entirely pass on the rise in production costs to retail prices. With fewer revenues and smaller profits, production was discouraged. The over-indebted companies decided to use their available resources to pay off debts and avoid bankruptcy, instead of increasing production. Thus, we concluded that a specific type of inflation and the companies’ over-indebtedness could severely aggravate recession.

抽象的

严重的衰退通常发生在通货紧缩的情况下。然而，巴西在2015年表现不佳，严重衰退并同时出现两位数的通货膨胀。费舍尔（Fisher）提出了关于严重衰退和价格水平剧烈波动的经典解释。受费舍尔模型的启发，我们详细解释了巴西的情况。该国展示了费舍尔模型的基本要素：债务扰动和价格水平扰动。紧缩性财政政策引发了经济衰退，紧缩开始后，物价水平急剧上升。政府削减支出中有对中间投入的补贴。一旦这些投入物的价格上涨，总的价格水平就会随之而来。在经济衰退的情况下，非金融公司的成本飙升。因此，他们无法将生产成本的上升完全转移到零售价格上。由于收入减少而利润减少，因此不鼓励生产。负债累累的公司决定使用现有资源偿还债务和避免破产，而不是增加产量。因此，我们得出的结论是，特定类型的通货膨胀和公司的过度负债可能会严重加剧衰退。