New Developmentalism and quasi-stagnation in Brazil

This paper argues that the Brazilian economy has been quasi-stagnant since the 1980s. In this decade, income per capita stagnated due to the foreign debt crisis and high inflation. From 1990 on, the country resumed growth but at a considerably lower level, with a rate inferior to the rich countries, configurating quasi-stagnation. The new historical facts that explain this were the public savings that turned negative, and two causes associated with the exchange rate: the belief in the policy of growth with foreign savings and the non-neutralization of the Dutch disease by engaging in trade liberalization. Those three facts depressed the investment rate. The paper ends with a few policy recommendations.