Macroeconomic constraints on the growth of Brazil’s economy
This chapter presents some policy proposals to solve this macroeconomic problem. Since the early 1990s the Brazilian economy averaged an annual growth rate of only 0.7 per cent in per capita terms, well below the 3 per cent it achieved between 1950 and 1980. The disequilibrium was the result of a policy that had relied excessively on external savings and the current account as instruments to finance economic growth in the second half of the 1970s. However, there are sources of fragility that could lead to a sudden and sharp reduction in the expansion of exports and in the growth rate of gross fixed capital accumulation, causing a collapse of the current expansion. The elimination of the macroeconomic constraints on output growth needs to be pursued along two directions: exchange rate policy and monetary policy. From the evidence available, It can infer that such rates of inflation are not prejudicial to economic growth in emerging economies.