Abstract
In the process of developing his thesis, Morley purports to find that fluctuations in the real money stock have a lagged effect on economic activity 3-6 months later (p. 186). He examines the controversy between the cost-push structuralists and the demand-pull monetarists over the causes of inflation in Brazil and attempts to resolve the issue by suggesting a mechanism through which the intermittent application of monetary constraint, via its differential impact upon the availability of working capital to Brazilian industry, results in inflation with stagnation. We wish to offer the following comments: 1. Morley purports to find three recessions and three recoveries caused by fluctuations in the real money stock. He finds this relationship by relating changes in a seasonally adjusted index of output with changes in the real money stock.
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