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Why Brazil has not grown: a comparative analysis of Brazilian and Chinese economic management

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Listed:
  • Fernando Ferrari-filho

    ()

  • Anthony Spanakos

    ()

Abstract

This paper aims to answer a very basic question asked by not only Brazilians, but people in other developing countries where liberal reform agendas were oversold, namely: why has China grown so rapidly and Brazil not. The first section establishes the basis for comparison between China and Brazil by contextualizing these countries within the BRICs concept. The second section aims at a partial explanation by surveying the results of a generation of Washington Consensus era growth. Given the agnosticism about total liberal packages and the puzzle of why incomplete reformers grew better, the paper engages in a comparative analysis of Brazilian and Chinese reforms focusing only on the issue of macroeconomic policy, especially the monetary and exchange rate regimes, and its effect on growth in the third section. That is, the Brazilian experience with inflation targeting and flexible exchange rate regime, since 1999, has contributed to slow start-stop growth and has been relatively high inflation, while the more managed approaches favored by China have done the reverse. Finally, the paper concludes offering policy advice to the other developing countries, BRICs, N-11, or otherwise.

Suggested Citation

  • Fernando Ferrari-filho & Anthony Spanakos, 2008. "Why Brazil has not grown: a comparative analysis of Brazilian and Chinese economic management," ENSAYOS DE ECONOMÍA 008063, UNIVERSIDAD NACIONAL DE COLOMBIA SEDE MEDELLIN.
  • Handle: RePEc:col:000418:008063
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    File URL: http://humanas.medellin.unal.edu.co/sites/default/files/ede/pdf/ede_32/ede_32_01_ferrari-spanakos_-_why_brazil_has_not_grown_comparative_analysis_brazilian_chinese_economic_management.pdf
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    References listed on IDEAS

    as
    1. Ricardo Hausmann & Dani Rodrik, 2005. "Self-Discovery in a Development Strategy for El Salvador," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2005), pages 43-101, August.
    2. Ricardo Hausmann & Lant Pritchett & Dani Rodrik, 2005. "Growth Accelerations," Journal of Economic Growth, Springer, vol. 10(4), pages 303-329, December.
    3. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-115, March.
    4. Paul Davidson, 1994. "Post Keynesian Macroeconomic Theory," Books, Edward Elgar Publishing, number 124, April.
    5. Edison, Hali J. & Levine, Ross & Ricci, Luca & Slok, Torsten, 2002. "International financial integration and economic growth," Journal of International Money and Finance, Elsevier, vol. 21(6), pages 749-776, November.
    6. Luiz Fernando de Paula, 2007. "FINANCIAL LIBERALISATION, EXCHANGE RATE REGIME AND ECONOMIC PERFORMANCE IN BRICs COUNTRIES," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 016, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    7. Ricardo Hausmann & Bailey Klinger, 2008. "Growth Diagnostics: Perú," Research Department Publications 2005, Inter-American Development Bank, Research Department.
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    More about this item

    Keywords

    Key words: China; Brazil; economic policy; economic growth;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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