In the last 20 years the Brazilian economy averaged an annual growth rate of only 0.7% in per-capita terms, well below the value of about 3% it reached between 1950 and 1980. Performance was also below that of similar emerging countries like South Korea, China, Mexico and Chile. If it were to continue at such a speed, Brazil would need about 100 years to double per-capita income, and even so it would never reach anything near the standard of living of the present developed countries. The main factors for low growth in the last 20 years are well known. We can pinpoint two fundamental disequilibrium in the economy, which in a long run perspective account for its semi‐stagnation. On one side, there is a progressively increasing internal disequilibrium, as a result of the attempt to cope with inflation via mechanisms of price and wage indexation, which have contributed to maintain inflation high and with a persistent tendency to accelerate. Only the “Plano Real” managed to curbe down the inflationary tendency, at least partially. At the same time, domestic disequilibrium was reduced by means of a monetary policy that was excessively conservative, to the effect of keeping the country’s rates of interest among the highest in the world, at the same time as generating the currency ap‐ preciation in the period between 1994 and 1998. The default on the external debt declared in 1987, exposed the extent and weight of Brazil’s external disequilibrium. This latter was the result of a policy that had excessively relied on external savings and the current account as instruments to finance economic growth in the second half of the 1970. The current account deficit, practically eliminated in the second part of the 1980, was to reappear dur‐ ing the first mandate of Fernando henrique Cardoso, as a result of the adoption of an exchange rate anchor. The correction of such disequilibrium could only be real‐ Brazilian Journal of Political Economy, vol 31, no 5 (125), pp 874-879, Special edition 2011