Financial Liberalization, Economic Performance and Macroeconomic Stability in Brazil: an assessment of the recent period (original) (raw)
Related papers
Financial liberalization and structural change: the Brazilian case in the 2000s
Economia e Sociedade
This paper discusses the relationship between financial integration and structural change based on a Minsky-Kregel approach. The motivation for this investigation derives from the fact that the opening of the Brazilian economy in the 1990s did not generate a structural change capable of increasing the weight of higher-technological sectors in the manufacturing industry. In theoretical terms we assume that financial liberalization in developing countries induces the loss in importance of the industrial sector in the productive structure, leading to an early deindustrialization process. In addition, it increases the external fragility and reduces the scope for developing countries to implement long-term economic policies to increase their potential output. In our econometric exercise applied to the Brazilian economy in the 2000s it was observed that financial integration and dependence on foreign savings, captured by an international liquidity proxy and dummy variables to incorporate ...
A comparative analysis of the financial liberalization in Turkey and Brazil
Panoeconomicus, 2020
The objective of this study is to explain the financial liberalization processes in Turkey and Brazil, to analyze the external financial liberalization processes and the financial integration indices and to compare the developments in the financial integration indices of Turkey and Brazil during the period 1980-2013. Our analysis revealed that, on the one hand, Brazil has continued its external liberalization process since the 1990s, but on the other hand, Brazil used two main tools to manage the capital flows, namely, capital controls and liberalization of capital outflows. In contrast, Turkey did not employ these tools following liberalization of the capital account.
Capital Flows and Controls in Brazil: What Have We Learned?
2005
This paper analyzes the relationship between capital account liberalization and macroeconomic volatility using Brazil as a case study. The paper provides several stylized facts regarding the evolution of capital flows and controls in Brazil in the last three decades. We conclude that, notwithstanding the financial crises and macroeconomic volatility of the recent past, capital account liberalization and the floating exchange regime have led to a more resilient economy. Further liberalization of the capital account is warranted and should be accompanied by a broad range of reforms to improve and foster stronger institutions.
Financial Liberalisation, Currency Instability and Crisis in Brazil: Another Plan Bites the Dust
Capital & Class, 1999
THIS PAPER PROVIDES AN INTERPRETATION of the Brazilian Real (stabilisation) plan, and its recent collapse. The plan was designed to maximise Brazil's ability to profit from the exceptional liquidity of the international credit markets, when low interest rates in the industrialised economies (especially the US) facilitated surges in capital flows to a select group of countries, the so-called ‘emerging markets.’ The general backdrop of the Brazilian plan, as well as similar policy initiatives in other emerging markets, was the neo-liberal fundamentalist prescription that countries should ‘liberalise, privatise, cut government spending and show to the world your commitment to liberal principles.’ Allegedly, this would be enough to inspire investor confidence, and allow the country to benefit from the exuberant power of capital inflows. The events that followed the adoption of that prescription in Brazil tell a very different story.
Financialization and Structural Change: the Brazilian case in the 2000s
2016
From a Minsky-Kregel approach, this paper discusses the relationship between financial integration and structural change. The motivation for this investigation is because the opening of the Brazilian economy in the 1990s did not generate a structural change in the direction of increasing the weight of higher-technological sectors in the manufacturing industry. In theoretical terms we assume that financial liberalization in developing countries induces the loss of importance of the industrial sector in the productive structure, leading to an early deindustrialization process. In addition, it increases the external fragility and reduces the scope for developing countries to implement long-term economic policies to increase their potential output. In our econometric exercise applied to the Brazilian economy in the 2000s it has been observed that financial integration and dependence on foreign savings, captured by an international liquidity proxy and dummy variables to incorporate the e...
MPRA Paper, 2015
We analyze the dynamic relationship between financial liberalization and financial stability for a panel of 25 developing countries during the period 1986-2010. The empirical study employs the Toda and Yamamoto's (1995) procedure to test for the Granger no-causality between six variables of our study including: credit-to-GDP gap, deposit to credit ratio, net interest margin , bank supervision, Liberalization measured by kaopen and capital control proxied by the Quinn index (2007). The results show a first bidirectional causal relationship between financial stability and deposit to credit ratio, a second one between financial stability and capital control and a third one between financial stability and liberalization.