ABSTRACT
In the period between 1974, after the first oil shock, and 1981, before the so-called “debt crisis,” Brazil was amongst the largest net recipients of real resources in the developing world. The industrial strategy and the macroeconomic adjustment policies adopted in Brazil after the first oil shock have been criticized on a number of grounds and with varying degrees of intensity by a number of economists. Carlos Langoni argues that Brazil’s financing strategy was an attempt to postpone adjustment based on the hypothesis that the increase in the real price of oil was only transitory. Brazil’s external imbalance required a structural change with new and large investments in capital goods and basic intermediate goods which would not have been feasible in a recessive environment. The chapter also presents an overview of the key concepts discussed in the subsequent chapters of this book.
