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Brazil's long‐term growth performance: trying to explain the puzzle

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  • Ricardo Adrogué
  • Martin Cerisola
  • Gaston Gelos

Abstract

Purpose - This paper seeks to assess Brazil's growth performance from a long‐term perspective. Brazil's growth performance over the past 25 years has been lackluster, and various hypotheses have been advanced to explain Brazil's disappointing growth record. Design/methodology/approach - In contrast with the existing literature, the paper uses cross‐country and panel estimation techniques to analyze Brazil's growth record, building on the vast empirical literature on growth and its long‐term determinants. It examines the extent to which fundamental factors found to be related to growth in the cross‐section help to explain Brazil's growth performance during 1960‐2000. It also explores the dynamics of growth across time by using panel data models to assess the role of various fundamentals that may have influenced Brazil's growth performance since 1960. Findings - The empirical evidence presented confirms that macroeconomic stability and several reforms have helped raise per capita growth in Brazil since the mid‐1990s. The results also show that some long‐standing structural weaknesses continue to weigh negatively on per capita growth. Practical implications - Reducing the high level of government consumption would help lower the overall consumption level in the economy and lower its intertemporal price – the real interest rate, thus helping to foster investment and growth. Originality/value - The paper provides useful information on Brazil's growth performance from a long‐term perspective.

Suggested Citation

  • Ricardo Adrogué & Martin Cerisola & Gaston Gelos, 2010. "Brazil's long‐term growth performance: trying to explain the puzzle," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(4), pages 356-376, September.
    • Handle: RePEc:eme:jespps:v:37:y:2010:i:4:p:356-376
    DOI: 10.1108/01443581011073381
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    Cited by:

    1. Laura Policardo & Lionello F. Punzo & Edgar J. Sánchez Carrera, 2016. "Brazil and China: Two Routes of Economic Development?," Review of Development Economics, Wiley Blackwell, vol. 20(3), pages 651-669, August.
    2. Altug, Sumru & Filiztekin, Alpay & Pamuk, Şevket, 2008. "Sources of long-term economic growth for Turkey, 1880–2005," European Review of Economic History, Cambridge University Press, vol. 12(3), pages 393-430, December.
    3. Manoel Bittencourt, 2011. "Is Copacabana Still the ‘Little Princess of the Sea’?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(01), pages 11-16, March.
    4. Mr. Jeromin Zettelmeyer, 2006. "Growth and Reforms in Latin America: A Survey of Facts and Arguments," IMF Working Papers 2006/210, International Monetary Fund.
    5. Hausmann, Ricardo, 2008. "Is Search of the Chains That Hold Brazil Back," Working Paper Series rwp08-061, Harvard University, John F. Kennedy School of Government.
    6. Alston, Lee J. & Mueller, Bernardo & Melo, Marcus André & Pereira, Carlos, 2010. "The Political Economy of Productivity in Brazil," IDB Publications (Working Papers) 1123, Inter-American Development Bank.
    7. Mr. Bennett W Sutton & Mrs. Genevieve M Lindow & Maria Isabel Serra & Mr. Gustavo Ramirez & Maria Fernanda Pazmino, 2006. "Regional Convergence in Latin America," IMF Working Papers 2006/125, International Monetary Fund.
    8. Nader Nazmi & Julio Revilla, 2011. "Brazil’s growth performance: a comparative perspective to the Asian giants," Economic Change and Restructuring, Springer, vol. 44(1), pages 7-24, April.
    9. Manoel Bittencourt, 2011. "Is Copacabana Still the ‘Little Princess of the Sea’?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(1), pages 11-16, March.

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