When Brazil ruined its economic policy

The 2008-09 international crisis led Brazil to think that ‘State Capitalism’ was the ‘solution’.

Government spending, subsidies, tax breaks for households and firms, wage increase, price controls, exchange rate devaluation, in short policies that would make even an ‘advocate’ such as Krugman blush were implemented …but the chart shows average growth between 2002-10 and 2011-13 for the World, Latin America , Brazil, Australia and Advanced Economies, where Australia is a sort of ‘control’ being a commodity exporter and all.

The result is nothing short of shameful!

Brazil screw up_1

And the future remains bleak. Recently, regarding China Scott Sumner posted the chart below. Brazil is really a ‘special case’. I pity visitors for the 2014 World Cup and 2016 Olympic Games!

Brazil screw up_2

HT Samuel Pessoa

About the Author

Marcus Nunes
João Marcus Marinho Nunes is a partner of Phynance Estratégias Quantitativas e Investimentos and a professor of Economics at Fundação Getúlio Vargas in São Paulo, Brazil. He also blogs here: http://thefaintofheart.wordpress.com/

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