Inflation not only can "grease" the labor market and thus allow downward shifts in real wages in response to a decline in demand along, but it can also put friction in the system ("sand") by increasing the noise in relative real wages (Groshen and Schweitzer, 1999).
Once the recovery began, it was expected that we would be able to restore the path that began in 2003, a path of decline in the deficit. There was a good beginning, but in 2011, it became more difficult, and in 2012 the deficit, which was planned to be 2 percent of GDP, reached 4.2 percent.