The mythological figure of the dragon, very common in fantastic stories like Game of Thrones and games, entered the serious economic vocabulary decades ago. He summarized a serious problem faced by the country. With a frightening appearance and a withering attack, the dragon was chosen to represent inflation. The option was no accident. THE Inflation dragon “burns purchasing power”, defines the economist and professor at Ibmec RJ, Gilberto Braga.
In 1980, the accumulated inflation for the year was 110.24%. In a decade, at the end of 1989, it accumulated 39,043,765%. The cover of the newspaper “Folha de S.Paulo” of December 29, 1989, brought the frightening numbers: December’s inflation had been 53.55%. The index accumulated in the year was 1,764.87%, the highest in history. Inflation in the 1980s reached 39,043,765%. The minimum wage is now NCz$ 1,283.95 (new Cruzados), with a real increase (above inflation) of 6.09%. Rents would readjust 1,383.75%.
Brazil was at the height of the inflationary period. At that time, the figure of the dragon associated with inflation became popular. In 1986, an illustration appeared on the cover of the newspaper “O Globo”. In June 1988, when the government predicted inflation of 20% for the month, the dragon became a “propaganda boy” for a bank’s insurance, occupying part of the pages of the newspaper “Folha de S.Paulo”. The financial squeeze had been incorporated into the daily life of Brazilians.
good guys and villains
In linguistic terms, the use of the mythological figure referred to “good guys and bad guys”, as researchers Maria Cristina Liro Gurgel and Solange Coelho Vereza, in the article “Inflation Dragon vs. Warrior Saint: A Study of Conceptual Metaphor”, published in 1996 in the linguistics magazine “Intercâmbio”, from PUC-SP.
“In this clash, villains appear who feed the inflation monster — oligopolies, prices, supermarkets — and the heroes/knights who fight it with fighting strategies — economic plans, hard currency”, highlight the authors.
For the economist and professor at PUC-Rio, Lucas Roberto Cunha, the interpretation is pertinent. “[Era a ideia do] Dragon that spits fire, causing the economic plans of the period to fail”, highlights the professor.
In the 1980s, the media already referred to the “inflation dragon” with cartoons and advertisements. But the figure became more assiduous in the daily life of Brazilians at the end of the decade, when inflation reached 800% in the year, as recorded in another edition of “O Globo”.
Prices doubling every month
Gilberto Braga states that the period was marked by financial lack of control, high external indebtedness and low growth in the country, which resulted in a scenario of hyperinflation.
In an attempt to overcome the situation, there were seven economic plans and five monetary reforms between 1986 and 1994, when the Plano Real was created, which finally managed to control inflation.
“Products doubled in price within 30 days. It was 100% inflation a month. When workers received their wages, they had no idea of their purchasing power, and this made people go to the markets to This scenario culminated in 1986, in the Cruzado Plan, under José Sarney’s government. [para controlar a inflação], but it did not work. The products disappeared from the shelves. The plan was lost, and others came – a good part of them had the characteristic of exchanging currencies”, says the professor.
He also states that at the time the country faced the so-called inertial inflation, that is, the continuous increase in prices to recompose past inflation added to the expectations of price behavior in the future. In practice, a merchant would readjust the price of an item to recoup losses from inflation and still add values that he imagined he could lose until the next readjustment.
According to the Central Bank, the economic crisis of the period led economists to call the 1980s the “lost decade”.
Inflation ended 1994 at 916%. After the Real Plan, it reached 22% in 1995. Since then, “even with the various international and internal crises that hampered economic stabilization, the IPCA accumulated in 12 months has passed 9% on a few occasions”, says Braga.
Opening the economy helped against inflation
According to Professor of Economics at PUC-SP and president of the Federal Council of Economics, Antônio Corrêa, economic stabilization with the Plano Real occurred, above all, after the intensification of the opening of the Brazilian economy.
“With successes and mistakes, today we have a more open economy, there was an expansion of competition in the international market and we started to see national and imported products, which expands the offer. inflation, potentially speaking,” he explained.
The professor says that the stabilization of the economy was possible because the country started to count on higher levels of foreign exchange reserves “to rescue paper money in the face of financial corrosion” – one of the factors that resulted in the preservation of the currency over almost 30 years. years old.
In 2021, the accumulated inflation in the country was a little more than 10% – a result “basically of the price of commodities in the international market, the devaluation of the real against the dollar and the absence of economic policies in Brazil that work on the formation of prices”, evaluates .