• 15-1968-capa-desenvolvimento-e-crise-no-brasil-1930-1967
  • 17-2004-capa-em-busca-do-novo
  • 2006-capa-as-revolucoes-utopicas-dos-anos-60
  • 10-1998-capa-reforma-do-estado-para-a-cidadania
  • 2014-capa-developmental-macroeconomics-new-developmentalism
  • 05-2009-capa-mondialisation-et-competition
  • 13-1988-capa-lucro-acumulacao-e-crise-2a-edicao
  • 10-1999-capa-reforma-del-estado-para-la-ciudadania
  • 04-2016-capa-macroeconomia-desenvolvimentista
  • 05-2010-capa-globalization-and-competition
  • 05-2010-capa-globalixacion-y-competencia
  • 01-2021
  • 02-2021-capa-a-construcao-politica-e-economica-do-brasil
  • 05-2009-capa-globalizacao-e-competicao
  • 03-2018-capa-em-busca-de-desenvolvimento-perdido
  • 16-2015-capa-a-teoria-economica-na-obra-de-bresser-pereira-3
  • 08-1984-capa-desenvolvimento-e-crise-no-brasil-1930-1983
  • 11-1992-capa-a-crise-do-estado
  • 01-2021-capa-new-developmentalism
  • 09-1993-capa-economic-reforms-in-new-democracies
  • 07-2004-capa-democracy-and-public-management-reform
  • 06-2009-capa-construindo-o-estado-republicano
  • 09-1993-capa-reformas-economicas-em-democracias-novas
  • 12-1982-capa-a-sociedade-estatal-e-a-tecnoburocracia

Brazil's macroeconomic policy institutions, quasi-stagnation, and the interest rate - exchange rate trap

Luiz Carlos Bresser-Pereira

In Edmund Amann, Carlos Azzoni and Werner Baer (in memoriam) Oxford Handbook on the Brazilian Economy: 221-240. Original version, "Brazil's 36 years-old quasi-stagnation and the interest rate-exchange rate trap" February 2, 2017.

Per capital income in Brazil has grown by around 1% a year from 1981; this implies quasi stagnation for a country that is supposed to be catching up. Four historical new facts explain why the investment rate and growth have been so low after the 1994 Real Plan: the reduction of public savings required to finance public investment, and three facts that reduce private investments: the end of the unlimited supply of labor, a very high interest rate, and the long- term overvaluation of the national currency. This interest rate-exchange rate trap, which represents a major competitive disadvantage for the manufacturing industry, is in place since 1990-92, when trade and financial liberalization dismantled the mechanism that neutralized the Dutch disease, while a liberal policy regime turned dominant and industrialization ceased to be viewed as a condition for growth.