Global booms and busts: how is Brazil's middle class faring?

Abstract

Brazil’s Post War economic history has been marked by inflationary booms and busts, which kept large parts of the population poor, as income distribution remained highly skewed, and most governments failed to put enough efforts and resources into education and health. That seems to have changed recently, as an increasing number of studies have shown considerable advances in the incomes of the lower and the middle classes. This essay examines those findings and puts them into a historical perspective, discussing earlier attempts and hopes of Brazilian policy makers to advance the welfare of the population. It concludes that while the last fifteen years have been remarkable for the country to achieve macroeconomic stability and while the increasing efforts of supporting the poor seemed to have been moving income distribution slowly towards a more equal level, there is still a long way to go. The 2008 world financial crisis also hit Brazil hard, but the recovery has been smoother and faster than in any OECD country. The impact of the current crisis may provide a good test as to the robustness of the previous trends to further the wellbeing of the poor and the middle class. JEL Classification: D31.