A brief history of Brazil's growth

Abstract

The paper studies Brazil’s economic growth and begins with a brief overview ofevents that marked the country’s development from her discovery to the 19th century. Itthen divides the years between 1900 and 2008 into four periods. The breaks in regimeoccur in 1918, 1967 and 1980, according to the methodology created by Bai and Perron(1998, 2003). The use of the accounting methodology serves the analysis of the behaviorof productivity in the previously identified different phases of the post-World War IIperiod. High inflation might have been a reason for the decline in productivity observedbetween 1980 and mid-1990s. The paper shows that terms of trade have a significanteffect on economic growth and output fluctuations. Other factors (such as fiscal stimulusor easy access to foreign finance) also matter for output accelerations in the short run.From 2004 to 2008, terms of trade improvement and debt reduction brought economicprogress. The emergence of a new era in this millennium will depend on wiser fiscalpolicies than those of the past.