ABSTRACT
This chapter presents the macroeconomic performance of Brazil with Taiwan and South Korea in the period since the first oil shock. It focuses on differences in monetary policy and wage behavior and followed by the patterns of external adjustment and financing from 1974 to 1978. The chapter reviews the three countries’ macroeconomic policy responses to the second oil shock and the divergent outcomes. It discusses further the policy requirements for Brazil to control inflation and reduce the debt burden in light of the two East Asian countries’ development experiences. South Korea occupied the middle ground between Brazil and Taiwan with respect to price stabilization and external adjustment. Compared with Taiwan’s highly restrictive monetary policy, the Brazilian monetary stance in 1973 and 1974 was much more relaxed. During the three years from 1976 to 1978 economic conditions in the three countries diverged widely.
