The Stagnation of Brazil's Exports: Reply

Abstract

In a recent issue of this Journal Thomas C. Lowinger presented a Comment on an earlier paper of mine.' My paper discussed three features of Brazilian trade and development during the years 1947-1962. First, I pointed out that, contrary earlier discussions that had considered Brazilian exports mainly in terms of coffee and its unpromising prospects, the stagnation of aggregate Brazilian export receipts during the period under consideration had been due largely the performance of noncoffee exports. Second, I noted that this poor export experience had been caused not by adverse world demand conditions, but by Brazilian policies that had limited the supply of noncoffee exports.2 The implication was that, if the Brazilian authorities would relax the measures discriminating against exports of noncoffee products, they could realistically expect substantial increases in noncoffee exports and thus in total foreign exchange earnings. Finally, I analyzed the special features that export stagnation, coming together with rapidly growing domestic demand, had imparted Brazilian economic development. Lowinger's Comment does not dispute my analysis in the latter two areas. He does, however, believe that to attribute the overall stagnation of Brazil's exports 'largely' its noncoffee exports would not be in accord with the post-1953 evidence. In addition, he considers it misleading view the entire post-World War II period in terms of one explanatory model; and suggests 1953, the year of a Brazilian devaluation, for demarcating two periods in Brazil's postwar export experience. I will discuss these two issues in sequence. There is a straightforward way test my hypothesis that the behavior of Brazil's aggregate export receipts (Xa) has been governed mainly by the behavior of noncoffee exports, (Xn0). This is regress annual observations of the first differences of Xa against