André Moreira Cunha

Brazilian countercyclical economic policies as a response to the Great Recession: a critical analysis and an alternative proposal to ensure macroeconomic stability

This article analyzes Brazilian macroeconomic policy and its economic performance as a response to the Great Recession. First, we present a theoretical analysis of Keynesian economic policies to coordinate and stabilize the dynamic of monetary economies. Second, we analyze Brazilian macroeconomic policy efforts to overcome the effects of the Great Recession, and we show the relationship between this policy and the main economic indicators, such as gross domestic product and inflation. In doing so, we argue that, although the Brazilian economic policy response to the global financial crisis and Great Recession seem to incorporate Keynesian economic policies, it is not possible to argue that the Brazilian economy be considered a Keynesian paradigm. Finally, in light of the Keynesian theory, we present an economic strategy to sustain the dynamism of the Brazilian economy.

Brazil After The Great Recession: Searching For A Coherent Developmental Strategy

Ever since the late 1990s, conventional economic wisdom has been challenged by the increasing instability of the financial markets and the emergence of new economic powers that have not been strictly following the so-called Washington Consensus, particularly China and India. In this context, the global financial crisis, which began in August 2007, and induced the “Great Recession” (GR), has substantially altered the dynamic process of the international economy. Governments of advanced and emerging countries have responded to the GR with massive fiscal and monetary stimulus, by rescuing financial and nonfi- nancial corporations and by reintroducing a more hands-on approach to deal with the economic problems (Griffith-Jones et al., 2010; Arestis et al., 2011). Brazil is not an exception. Alongside the countercyclical policies aimed at smoothing the negative impacts of the external environment, the central government has been trying to implement more active developmental policies.