The Political Construction of Brazil

2017. An encompassing analysis of Brazil’s society, economy and politics since the Independence. A national-dependent interpretation. Three historical cycles of the relation state-society: State and Territorial Integration Cycle (1822-1929), Nation and Development Cycle (1930-1977) and Democracy and Social Justice Cycle (1977-2010). Crisis since then. (Book: Lynne Rienner Publishers)

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Macroeconomia Desenvolvimentista

2016. With José Luis Oreiro e Nelson Marconi. Our more complete analysis of Developmental Macroeconomics – the central economic theory within New Developmentalism. (book)

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Brazil's macroeconomic policy institutions, quasi-stagnation, and the interest rate - exchange rate trap

Luiz Carlos Bresser-Pereira

In Edmund Amann, Carlos Azzoni and Werner Baer (in memoriam) Oxford Handbook on the Brazilian Economy: 221-240. Original version, "Brazil's 36 years-old quasi-stagnation and the interest rate-exchange rate trap" February 2, 2017.


Per capital income in Brazil has grown by around 1% a year from 1981; this implies quasi stagnation for a country that is supposed to be catching up. Four historical new facts explain why the investment rate and growth have been so low after the 1994 Real Plan: the reduction of public savings required to finance public investment, and three facts that reduce private investments: the end of the unlimited supply of labor, a very high interest rate, and the long- term overvaluation of the national currency. This interest rate-exchange rate trap, which represents a major competitive disadvantage for the manufacturing industry, is in place since 1990-92, when trade and financial liberalization dismantled the mechanism that neutralized the Dutch disease, while a liberal policy regime turned dominant and industrialization ceased to be viewed as a condition for growth.

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