Building resilience to international financial crises: lessons from Brazil

Abstract

PurposeThis paper sets out to argue that, due to a stable set of economic policies over the past decade, today Brazil is much more resilient to international financial crises than in the 1990s.Design/methodology/approachThe paper presents preliminary macroeconomic data in a country case study.FindingsThe paper concludes that the initial impact of the current international financial crisis on Brazil has been much less severe than similar crisis episodes in the past.Research limitations/implicationsGiven that the crisis is still unfolding, the paper presents only preliminary data regarding its impact on emerging markets.Practical implicationsThe paper suggests that emerging markets should adopt flexible exchange rate regimes and stable macroeconomic policies as a means to reduce their exposure to international shocks.Originality/valueThe paper makes an initial diagnosis regarding the impact of the international financial crisis on emerging markets that have adopted sensible economic policies, and is of interest to scholars, business people, and policymakers in developed and emerging countries.