Looking Into the Abyss? Brazil at the Mid-2010s

Fernando Cardim de Carvalho

Economics Working Paper Archive from Levy Economics Institute

Abstract: The Brazilian economy in 2015 was afflicted by a lethal combination of decelerating activity and accelerating inflation. Expectations for 2016 are equally or even more adverse, since the effects of rising unemployment emerge only after a lag. The domestic debate has pitted analysts who believe the crisis is due exclusively to past policy mistakes against those who believe that all was well until the government decided to implement austerity policies in 2015. A closer examination of the evidence shows that, in fact, both causes contributed to the crisis. But it also suggests that its depth has a more proximate cause in the political collapse of the federal government in 2015, which led Brazilian society to an impasse for which one cannot yet visualize the solution.

Keywords: Brazilian Economy; Macroeconomic Policy; Great Recession (search for similar items in EconPapers)
JEL-codes: E31 E32 E60 (search for similar items in EconPapers)
Date: 2016-02
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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