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The tale of the contagion of two crises and policy responses in Brazil: a case of (Keynesian) policy coordination?

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  • Luiz Fernando de Paula
  • André de Melo Modenesi
  • Manoel Carlos C. Pires

Abstract

This paper aims to assess the reasons for the economic slowdown in Brazil after 2010. In particular, it contributes to a better understanding of why Brazil’s countercyclical policies succeeded in handling the contagion resulting from the Lehman Brothers crisis but did not manage the contagion caused by the euro crisis. The paper examines what we understand by Keynesian policies and the importance of policy coordination and then evaluates the extent to which Brazil used coordinated economic policies in the face of both crises. The main hypothesis of the paper is that the difference in the performance of the countercyclical policies in both crises is related mainly to Brazil’s lack of coordination of macroeconomic policies in 2011–12, especially the implementation of fiscal policy.

Suggested Citation

  • Luiz Fernando de Paula & André de Melo Modenesi & Manoel Carlos C. Pires, 2015. "The tale of the contagion of two crises and policy responses in Brazil: a case of (Keynesian) policy coordination?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 37(3), pages 408-435, July.
    • Handle: RePEc:mes:postke:v:37:y:2015:i:3:p:408-435
    DOI: 10.1080/01603477.2015.1000118
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    References listed on IDEAS

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    1. Fernando J. Cardim de Carvalho, 1992. "Mr Keynes And The Post Keynesians," Books, Edward Elgar Publishing, number 79.
    2. Claúdio Hamilton Matos dos Santos & André Gaspar Cieplinski & Débora Pimentel & Gustavo Bhering, 2015. "Por que a Elasticidade-Câmbio das Importações é Baixa no Brasil? Evidências a Partir das Desagregações das Importações Por Categorias de Uso," Discussion Papers 2046, Instituto de Pesquisa Econômica Aplicada - IPEA.
    3. André Minella & Nelson F. Souza-Sobrinho, 2009. "Monetary Channels in Brazil through the Lens of a Semi-Structural Model," Working Papers Series 181, Central Bank of Brazil, Research Department.
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    Cited by:

    1. Fernando Rugitsky, 2017. "The rise and fall of the Brazilian economy (2004-2015): the economic antimiracle," Working Papers, Department of Economics 2017_29, University of São Paulo (FEA-USP).
    2. Feijo, Carmen, 2024. "Stagnation of the Brazilian Economy and Peripheral Financialization," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 77(2), pages 207-232.

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