That is the topic of my latest Bloomberg column, here is one excerpt, starting with the reality of Brazilian hyperinflation in the early 1990s:

Fortunately, economists and other reformers came to the rescue and designed an effective plan for currency stabilization. Brazil first created a virtual currency, called the URV, and switched contracts and prices to the new accounting unit. Next, a new currency, the real, was introduced as equal in value to the URV and roughly equal to the US dollar. That created the prospect of a new and more stable currency.

The crucial part of the reforms was a credible plan for fiscal stability. Brazil wasn’t experiencing hyperinflation for no reason — rather, the freshly printed money was needed to make good on promised government expenditures. So to make the numbers add up without hyperinflation, the Brazilian government carried out some budget cuts, privatized some assets, transferred some functions to state and local governments, and made some constitutional and legislative pledges in the direction of a balanced budget...

Yet the ending to this story is by no means entirely happy. For several years Brazil’s economy has been growing below 1%, though it has recently climbed above 2%. The country has bountiful natural resources, plenty of human talent, some excellent companies and universities, and no natural geopolitical enemies. Still, its economic growth has been mediocre. Brazil ought to be able to achieve annual growth of 4% to 6%.

The causes of this disappointing growth are varied and subject to dispute. Possible culprits include corruption, excess protectionism, an economy too dependent on natural resources, an unreliable education system and, perhaps, a loss of economic dynamism. In the golden years of the late 1960s and early ‘70s, Brazil had very high growth rates, hitting 14% in 1973, so extremely good performance is possible.

Worth a ponder.