IDEAS home Printed from https://ideas.repec.org/p/jet/dpaper/dpaper751.html
   My bibliography  Save this paper

Did the recent Brazilian economic defaults originate from real economic or financial issues?

Author

Listed:
  • Burkowski, Erika
  • Kim, Jiyoung

Abstract

This paper aims to discover whether the origins of the recent Brazilian economic defaults (2009, 2015, and 2016) were related to the real economy or to pure financial transactions. To do so, we analyzed the discrepancy of dispersion index (DDI) and structural path decomposition from flow of funds (FOF) matrices of the Brazilian economy from 2004 to 2015. Financial transactions mirrored real transactions in almost every year, except in 2008, when financial transactions more highly contributed to the imbalance. Additionally, the total value of financial firms’ transactions grew more than that of non-financial firms in periods preceding economic defaults (2008 and 2014) while the continued growth of non-financial firms transactions decreased the DDI in 2009 and 2015. Changes in the power of dispersion indices corroborated this observation by pointing out that the government and non-financial firms reduced their financial sharing while financial firms improved their role as financial intermediaries and, at the same time, the rest of the world was receiving a significant portion of Brazilian savings.

Suggested Citation

  • Burkowski, Erika & Kim, Jiyoung, 2019. "Did the recent Brazilian economic defaults originate from real economic or financial issues?," IDE Discussion Papers 751, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper751
    as

    Download full text from publisher

    File URL: https://ir.ide.go.jp/?action=repository_action_common_download&item_id=50840&item_no=1&attribute_id=22&file_no=1
    File Function: First version, 2019
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    flow of funds; asset liability matrix; financial imbalance; system of national account; financial instruments; Financial crises;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jet:dpaper:dpaper751. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michitaka Imamitsu (email available below). General contact details of provider: https://edirc.repec.org/data/idegvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.