Abstract
Brazil’s trade and industrial policies in the last decade has taken an increasingly sharp turn towards boosting and protecting the local manufacturing industry, particular after the 2008 financial crisis. This paper reviews these policies and their initial results and argues that, while they have brought some short-term relief, they have done so at the cost of undermining the fundamentals of long-term growth. The country’s recent lackluster economic performance—an unfortunate combination of high inflation, low growth, and a deteriorating current account deficit seem to confirm this view.
Highlights
In the last two decades, Brazil has been exposed to important structural changes in the world economy that have posed major challenges to policymakers
Rather than rehashing questionable policies of the past, the best way for the country to meet the challenges of a transformed world economy is to resume its attempts to streamline government intervention, whose limited resources should be focused on providing public goods, strengthening institutions, and addressing classic market failures in education, infrastructure, and science, technology and innovation (S&T&I)
Government intervention has made a steady comeback in Brazil, reaching its peak in the years after the financial crisis
Summary
Where is Brazil going? Taking stock of recent trends in industrial and trade policies and the challenges ahead. Online at https://mpra.ub.uni-muenchen.de/59737/ MPRA Paper No 59737, posted 13 Aug 2020 07:54 UTC. Taking Stock of Recent Trends in Industrial and Trade Policies and the Challenges Ahead* Where Is Brazil Going? Taking Stock of Recent Trends in Industrial and Trade Policies and the Challenges Ahead*
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