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Is Search of the Chains That Hold Brazil Back

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  • Hausmann, Ricardo

    (Harvard U)

Abstract

This paper performs a Growth Diagnostic for Brazil. It shows that many aspects of the Brazilian economy have been improving including the macro picture, educational progress and the external front. Moreover, Brazil has many productive possibilities and high-return investments. Yet growth is hampered because of a relatively old-fashioned problem that has been solved in many other countries in the region: creating a financially viable state that does not over-borrow, over-tax or under-invest. We show that domestic saving is the binding constraint on growth and that it has a fiscal cause. Although things are trending in the right direction, the challenge is to exploit the current good times to create the fiscal basis for a sustained growth acceleration.

Suggested Citation

  • Hausmann, Ricardo, 2008. "Is Search of the Chains That Hold Brazil Back," Working Paper Series rwp08-061, Harvard University, John F. Kennedy School of Government.
  • Handle: RePEc:ecl:harjfk:rwp08-061
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    File URL: https://research.hks.harvard.edu/publications/workingpapers/citation.aspx?PubId=5982&type=WPN
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    References listed on IDEAS

    as
    1. World Bank, 2007. "Brazil - Improving Fiscal Circumstances for Growth : Volume 2. Main Report," World Bank Other Operational Studies 8005, The World Bank.
    2. World Bank, 2007. "How to Revitalize Infrastructure Investments in Brazil : Public Policies for Better Private Participation, Volume 2. Background Report," World Bank Other Operational Studies 8045, The World Bank.
    3. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    4. Ricardo Adrogué & Martin Cerisola & Gaston Gelos, 2010. "Brazil's long-term growth performance: trying to explain the puzzle," Journal of Economic Studies, Emerald Group Publishing, vol. 37(4), pages 356-376, September.
    5. World Bank, 2007. "How to Revitalize Infrastructure Investments in Brazil : Public Policies for Better Private Participation, Volume 1. Main Report," World Bank Other Operational Studies 8047, The World Bank.
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    Cited by:

    1. Khan Shahrukh Rafi, 2011. "Growth Diagnostics: The Puzzle of Pakistan's Lagging Economic Growth," Global Economy Journal, De Gruyter, vol. 11(4), pages 1-19, December.
    2. Flavio Feferman, 2014. "Brazil: good governance in the tropics–the rise of the Porto Digital Cluster of Innovation," Chapters,in: Global Clusters of Innovation, chapter 12, pages 296-338 Edward Elgar Publishing.
    3. Lee J. Alston & Bernardo Mueller & Marcus André Melo & Carlos Pereira, 2010. "The Political Economy of Productivity in Brazil," IDB Publications (Working Papers) 1123, Inter-American Development Bank.
    4. Ricardo Hausmann & Bailey Klinger & Rodrigo Wagner, 2008. "Doing Growth Diagnostics in Practice: A 'Mindbook'," CID Working Papers 177, Center for International Development at Harvard University.
    5. Dragan TEVDOVSKI & Vladimir FILIPOVSKI & Igor IVANOVSKI, 2014. "A Diagnostics Approach To Economic Growth In Small Open Economies: The Case Of The Republic Of Macedonia," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 13, pages 47-68, June.
    6. Rodrik, Dani, 2009. "Growth After the Crisis," CEPR Discussion Papers 7480, C.E.P.R. Discussion Papers.
    7. Alex Segura-Ubiergo, 2012. "The Puzzle of Brazil's High Interest Rates," IMF Working Papers 12/62, International Monetary Fund.
    8. World Bank, 2011. "Turkey - Country Economic Memorandum (CEM) : Sustaining High Growth - The Role of Domestic savings : Synthesis Report," World Bank Other Operational Studies 12264, The World Bank.
    9. Yaroslava Babych & Michael Fuenfzig, 2012. "An Application of the Growth Diagnostics Framework: The Case of Georgia," Working Papers 001-12, International School of Economics at TSU, Tbilisi, Republic of Georgia.
    10. Harald HABERMANN & Pablo PADRUTT, 2011. "Growth Diagnostics: Strengths and Weaknesses of a Creative Analytical Framework to Identify Economic Growth Constraints in Developing Countries," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(7), pages 1-25, December.

    More about this item

    JEL classification:

    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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