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New Features of the Brazilian External Sector Since the Great Global Crisis

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The Brazilian Economy since the Great Financial Crisis of 2007/2008

Abstract

In Brazilian history, like in most peripheral countries, there were various episodes of ‘dollar shortage’ leading to domestic crisis. From 2008 to 2014, many of the typical ingredients of such events were present: international crisis, volatile exchange rate, increasing current account deficits and subsequent decline in economic activity. This time, however, there was no lack of foreign currency. From the analysis and periodization of the flows and stocks of the Balance of Payments between 2011 and 2015, this chapter argues that a ‘new reality’ of the Brazilian external liabilities allowed for lasting current account deficits at high levels, even in the context of worsening international scenario. Secondly, it states that the global economy played an important role in the deceleration of the Brazilian economy after 2011, but this operated mainly through indirect channels, related to the financial and productive structural linkages of the Brazilian economy to the international cycles.

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Notes

  1. 1.

    See, for example, Bresser-Pereira and Gala (2008); Bresser-Pereira et al. (2014).

  2. 2.

    On capital control measures adopted at that time, see Prates and De Paula (2017).

  3. 3.

    The whole value of ‘other investments’ and ‘intercompany loans’ are denominated in foreign currency.

  4. 4.

    See Biancarelli and Rosa (2015) for an empirical assessment of this aspect.

  5. 5.

    For an argument with similar conclusions, departing from different theoretical assumptions and evidence, see Biancareli (2007).

  6. 6.

    See Rossi (2016, Chap. “Financialisation and Investment Behaviour Among Non-Financial Corporations in Brazil Since the Global Crisis”).

  7. 7.

    For preliminary quantitative evidence of these relations between the global liquidity cycle and domestic credit, with emphasis on the role of public banks, see Cunha et al. (2016) and Biancarelli et al. (2017).

  8. 8.

    This obviously does not revoke other sources of vulnerability, like the growing share of public debt held by foreign investors, as highlighted for example by Akyuz (2014).

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Authors and Affiliations

  1. Universidade Estadual de Campinas, Campinas, SP, Brazil

    André Biancarelli, Renato Rosa & Rodrigo Vergnhanini

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  1. André Biancarelli
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  2. Renato Rosa
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  3. Rodrigo Vergnhanini
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Correspondence to André Biancarelli .

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Editors and Affiliations

  1. Department of Land Economy, University of Cambridge, Cambridge, United Kingdom

    Philip Arestis

  2. Institute of Economics, University of Campinas, Campinas, São Paulo, Brazil

    Carolina Troncoso Baltar

  3. Institute of Economics, University of Campinas, Campinas, São Paulo, Brazil

    Daniela Magalhães Prates

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Biancarelli, A., Rosa, R., Vergnhanini, R. (2017). New Features of the Brazilian External Sector Since the Great Global Crisis. In: Arestis, P., Troncoso Baltar, C., Prates, D. (eds) The Brazilian Economy since the Great Financial Crisis of 2007/2008. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64885-9_5

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  • DOI: https://doi.org/10.1007/978-3-319-64885-9_5

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