External shocks and growth prospects: the case of Brazil, 1973-1989

Beyond the Global Crisis, 2012

The aim of the paper is to explain the growth pattern of the Brazilian economy during the 1971-2005 period as a sucession of phases that are identified and described according to qualitative characteristics associated with historical events. Additionally, we show that the transition from one phase to another is explained by alteration in the economic environment and/or changes in policies that put in march structural changes. In this sense in the proposed analysis growth pattern and structural changes were both identified and analysed. 1-A fresh look at known issues Growth cycles are well documented and studied phenomena in the LDCs, in the case of Latin America they are often related to the evolution of the conditions of international liquidity (Amado, et al 2007). But, in general, growth in such countries tends to be less stable than in developed ones, as those economies are often constrained by a variety of domestic and international constraints, among them Balance of Payments constraints. This has been true also of our case study hereafter, the Brazilian economy: at the beginning of the 1960s and in the 1980s, and again, more recently, during the second half of the 1990s following the financial crises of Mexico in 1995, Asia in 1997, and Russia, in 1998. The unfolding of the current major crisis will surely offer more evidence urging a fresh reflection on comparative growth dynamics.

2009

Growth and Sustainability in Brazil, China, India, Indonesia and South Africa, 2010

T Te ex xt to os s p pa ar ra a D Di is sc cu us ss sã ão o 241 TEXTO PARA DISCUSSÃO 241 • JANEIRO DE 2010 • 1 Os artigos dos Textos para Discussão da Escola de Economia de São Paulo da Fundação Getulio Vargas são de inteira responsabilidade dos autores e não refletem necessariamente a opinião da FGV-EESP. É permitida a reprodução total ou parcial dos artigos, desde que creditada a fonte.

Cambridge Journal of Economics, 2012

The objective of the present article is to analyze the causes of growth slowdown of Brazilian economy initiated in the middle of the 1980´s from a Keynesian-Structuralist perspective, according to which long term growth is associated with structural change and capital accumulation. Throughout the article it will be tested the hypothesis that growth slowdown was caused by a huge reduction in the rate of capital accumulation due to a substantial reduction of the investment share in real output that begun in the 1980´s and increased in the 1990´s. The reduction of the investment share was the result of the existing imbalances of macroeconomic prices (mainly overvalued real exchange rate and exchange rate/wage ratio) that caused a premature deindustrialization of Brazilian economy with negative effects over investment opportunities. The period to be analyzed will be from 1980 to 2012. These statistical procedures will allow us to define the list of independent variables of the econometric models to be estimated. Econometric results are compatible with the theoretical hypothesis regarding growth slowdown of Brazilian economy.

International Business Research

This short paper briefs about the influence of the Brazilian exports to China in the economy and also points out, according to some experts in the subject, some ways to get out of the economic recession. The data were collected from secondary sources. The results show not only a dependence on Brazilian exports to China, mainly commodities, but also a general dependence on Brazilian commodities export worldwide. The research identifies that political stability and fiscal adjustment are the first steps to start getting out of the present crisis.

International Affairs, 1998

The Brazilian economy: recent developments and future prospects

IDB Publications, 2004

This paper examines Brazilian economic growth as part of the project "Explaining Economic Growth Performance" launched by the Global Development Network (GDN), the purpose of which is to explain economic growth performances across seven regions of the world. According ...

OVERVIEW According to World Bank's GDP ranking (July 2017), Brazil is the ninth largest economy in the world. However, it is still considered a developing country, aside from Russia (12th), India (7th) and China (2nd); all participants of the BRIC (predictions that by 2050, these four countries will become the world's dominant suppliers of manufactured goods and services and raw materials). Despite having a negative GDP growth in 2015 and 2016, the Brazilian economy has impacted qualitatively for the population, with a significant reduction in income inequality. The Gini coefficient (World Bank, 2017) for the country's distribution of household per capita income fell to 0.513 in 2015, considering that it was 0.633 in 1989. In other words, approximately 20 million Brazilians were lifted out of poverty (IPEA, 2010b; Pochmann, 2007 cited by Mattei, 2015). Highlighting the numbers above, there is a curious contrast between negative growth and increase of equality. This paper will indeed present the economic contradictions and governmental instabilities that Brazil has undergone in the last 60 years; these atypical situations make difficult to both apply (exogenous or endogenous) economic models and assertively predict the convergence path in which the country will tread, whether it will catch up or fall behind. GROWTH MODELS Table 1 in appendix page shows a GDP yearly rollercoaster in Brazil's performance. To contextualize those frequent ups and downs, most variations have happened in between crisis or tensions in the political scenario; except in the year of 2009, hit by an echo from the Global Economic Crisis of 2007-2008. Brazilian economic history demonstrates different results comparing with the measures taken throughout the last 60 years (1957-2017). There is no single theoretical model which could perfectly describe the Brazilian growth history. Moreover, empirical frameworks become very difficult to suit so many different changes and realities in the past decades. Some research findings may help to understand the whole panorama. ROSTOW MODEL (1957 – 1984) It is noticeable a certain similarity between Rostow (1991) Model and the first 27-year-period to be explained. The first and second stages, " Traditional Society " and " Transitional Stage " are well represented by the years from 1957 and 1963, where Brazil fostered a "development policy", reaping the fruits of a wave of world (postwar) prosperity. The economy was widely appreciated in the national raw materials, thus helping the country accumulate a large volume of foreign exchange reserves. The agricultural sector accounted for 25% of GDP and housed 60% of the labor force. Illiteracy quickly fell from 50% to 39%. One of the most significant Brazilian companies on the world stage, Petrobras (founded in 1953), took strength in this period, paving the way for new manufacturing technologies and intensifying rural exodus. Zerkowski and Veloso (1982) recorded an average growth rate of more than 7% per year in GDP during this period. The only exception was in 1963 that GDP growth was 0.875% because of a political tension pre-military coup. The third stage, " Take off " , from 1964 to 1973, Military dictatorship took over the Brazilian government for 21 years. In the first 10 years, unlike other Latin American dictatorships, the military government intensified imports, diversified industrial production, which also led to the diversification of exports and sought intentional loans, injecting large volumes of capital with a focus on increasing GDP growth, reducing inflation and generating balance surplus. These measures were aimed at modernizing the farmworker's labor force and offering economic incentives to market-oriented farmers instead of facilitating agrarian reform. Bacha, Caetano, and Carvalho (2014) point out that "in 1965, the Federal Government created the National Rural Credit System (SNCR), which became a crucial source of low-interest loans for farmers seeking to buy industrial machinery and inputs, therefore, a key step towards increasing agricultural productivity ". At the apogee of the dictatorship, Brazil reached its peak of GDP growth, 13.9% in 1973.

Journal of Economic Studies, 2010

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper assesses Brazil's growth performance from a long-term perspective, using crosscountry and panel estimation techniques, building on the vast empirical literature on growth. The empirical evidence presented in this paper confirms that macroeconomic stability and several reforms have helped raise per capita growth in Brazil since the mid-1990s. The results also show that some long-standing structural weaknesses continue to weigh negatively on per capita growth. Reducing the high level of government consumption would help lower the overall consumption level in the economy and lower its intertemporal price-the real interest rate-thus helping to foster investment and growth. JEL Classification Numbers: C31, C33, E60, O40, O50, O57