Policies·pe_inti_heterodox_plan_1985

Inti heterodox stabilisation plan (Peru, 1985)

PER·1985 – 1987·enacted 1985-08-01candidate

movesspending level↑financial deregulation↓labour market flexibility↓monetary expansion direction↑

What the policy did

Replaced sol with inti at 1 to 1,000 (1 August 1985). Froze prices, wages, exchange rate (initial 12% devaluation then fixed at 13.95 I/USD), introduced multiple-exchange-rate system (MUC official plus financial), interest-rate controls, and expansionary fiscal stance. GDP rebound 9.7% (1986), 6.9% (1987) via capacity utilisation. Began unravelling late 1987 as reserves depleted.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended

↑

spending level

fiscal.spending_level

General government spending as share of GDP, excluding transfers already captured under fiscal.transfer_expansion to avoid double-counting.

increased · strong

higher spending share

↓

financial deregulation

regulatory.financial_deregulation

Financial-sector regulation — banking separation, capital requirements, cross-border activity rules, derivatives oversight.

decreased · strong

looser financial regulation

↓

labour market flexibility

regulatory.labour_market_flexibility

Ease of hiring/firing, collective-bargaining scope, minimum wage rigidity, temporary/permanent contract regulation.

decreased · moderate

less flexible (stronger employment protection)

↑

monetary expansion direction

monetary.monetary_expansion_direction

Direction of monetary-base expansion decisions relative to trend. Separate from fiscal.transfer_expansion even when correlated.

increased · strong

expansionary (balance sheet, rates lower than Taylor)

Enacted by

peru_garcia_apra_first_1985_1990

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Truss 2022 mini-budget shows that unfunded fiscal expansion above the ZLB triggers sharp bond-market and currency responses through expected-inflation and risk-premium channels.

unfunded_fiscal_expansion_above_zlb_bond_market_responseinferred

viafiscal.spending_levelmonetary.monetary_expansion_direction

SUPPORTED — GBP/USD trough on 2022-09-26 (1.0703) was 5.02% below the 2022-09-22 pre-announcement close (1.1269); log-decline +0.0515 clears the 3.0% threshold …

supported

Fiscal multipliers are state-dependent: large at ZLB, small near full employment; no single-number answer is policy-relevant.

fiscal_multipliers_state_dependentinferred

viamonetary.monetary_expansion_directionfiscal.spending_levelregulatory.labour_market_flexibility

REFUTED — sign - OPPOSITE claim +, cumulative_effect=-1.569, h=5, p_h=0.0155

refuted

Across the 2008-2014 ZLB era and the 2020-2021 pandemic-response window, large-scale de-facto monetary finance of fiscal expansion in the US, Japan, and the Eurozone did not produce headline-CPI inflation consistent with naive quantity-theoretic monetisation predictions: cumulative central-bank balance-sheet expansion exceeded 15% of GDP while CPI YoY remained below 3% in each economy across both windows.

monetary_finance_zlb_no_inflationinferred

viamonetary.monetary_expansion_directionfiscal.spending_level

REFUTED — CPI threshold breach: USA zlb_2008_2014 peak 3.81% in 2008; USA covid_2020_2021 peak 4.68% in 2021; Eurozone CPI not loaded

refuted

The Soviet central-planning system, having already exhibited TFP stagnation 1970-1989, underwent a canonical institutional and economic collapse 1989-1998 as plan-enforcement was withdrawn without functioning market institutions in place.

soviet_union_central_planning_gdp_collapse_1989_1991inferred

viamonetary.monetary_expansion_directionfiscal.spending_level

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['derived: count of canonical_metrics with threshold met']

run pending

In a broad-country panel 1990-2019, greater labour-market flexibility — measured by lower OECD EPL overall strictness, higher ease-of-hiring scores, and absence of centralized wage bargaining — predicts higher employment-to- population ratios and faster real GDP per capita growth, controlling for institutional quality, education, and trade openness.

labour_market_flexibility_employment_growth_panelinferred

viaregulatory.labour_market_flexibilityregulatory.financial_deregulation

PARTIAL — coef=-1.251, p=0.162 (above α=0.1); direction inconclusive

partial

Countries with stricter employment protection legislation — measured by the OECD EPL indicator (or comparable alternatives where OECD EPL is missing) — experience longer average unemployment duration, holding other controls constant.

labour_market_flexibility_unemployment_durationinferred

viaregulatory.labour_market_flexibility

INCONCLUSIVE_DATA_PENDING — interaction term requested but no loadable constructed interaction variable is defined. The generic panel_fe runner would otherwise …

run pending

Across OECD economies 1995-2021, the cumulative fiscal multiplier on real output at the zero lower bound (defined as quarters with policy rate ≤ 0.50% AND inflation expectations anchored below 2.5%) exceeds 1.2 at horizon h=8 quarters, while the comparable normal-regime multiplier is below 0.7.

zlb_state_dependent_multiplier_pk_framinginferred

viamonetary.monetary_expansion_directionfiscal.spending_levelregulatory.labour_market_flexibility

INCONCLUSIVE_DATA_PENDING — no treatment variable loaded; missing: ['oecd:NAQ_government_consumption', 'manual: Ramey-Zubairy military news shocks; Guajardo-Lei…

run pending

Post-2008 large-scale asset purchase programmes by the Federal Reserve, ECB, Bank of England, and Bank of Japan produced a measurable divergence between asset-price inflation (equities and residential real estate) and headline consumer-price inflation until roughly 2021.

qe_asset_inflation_vs_cpi_divergence_post_2008inferred

viamonetary.monetary_expansion_directionfiscal.spending_level

refuted — Only 2 of 8 countries had even a 0.10 log-point asset-vs-CPI gap by 2020 (mean GAP_2020 = -0.02). The post-2008 divergence story does not survive a pa…

refuted

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

Delfim Netto heterodox reflation (Brazil, 1979-1980)

BRA·1979

match

2.4

spending levellabour market flexibilitymonetary expansion direction

Abenomics — three arrows (2013)

JPN·2013

match

2.1

monetary expansion directionspending levellabour market flexibility

Choinomics fiscal stimulus + LTV/DTI deregulation 2014-2015

KOR·2014