External shocks and financial imbalances: an interpretation of the Brazilian crisis
Abstract
This paper investigates the causes of the Brazilian recession that began in 2014. If, on the one hand, the conventional diagnosis attributes the crisis to a lack of control of public finances, other interpretations emphasize external shocks and excessive indebtedness of the private sector. The alternative hypothesis is that the deterioration of public accounts is a consequence of the crisis and not its cause. The methodology developed by Toda and Yamamoto (1995) is used to verify the hypothesis of non-causality of Granger between the time series of the balances of the private sector, public sector and current account, from the Central Bank of Brazil (BCB, 2017) for the 2002-2017 period. The results suggest that the balances of the external and private sectors cause in the Granger sense the balance (result) of the public sector.
Downloads
References
Abell, J. D. (1990). Twin deficits during the 1980s: An empirical investigation. Journal of macroeconomics, 12(1), 81–96.
Almeida, M., Lisboa, M. B., & Pessoa, S. (2015). O ajuste inevitável. Folha de São Paulo. Disponível em: <http://www1.folha.uol.com.br/fsp/
ilustrissima/226576-ajuste-inevitavel.shtml
Arestis, P., de Paula, L. F., & Ferrari, F. (2007). Assessing the economic policies of President Lula da Silva in Brazil: has fear defeated hope? In: P. Arestis & M. Sawyer (Eds.) Political economy of Latin America: recent economic performance. Basingstoke: Palgrave Macmillan.
BCB - Banco Central Do Brasil. (2017). Séries temporais. Disponível em: <http://www4.bcb.gov.br/pec/series/port/aviso.asp>. Acesso em 10 de outubro de 2017
Barro, R. J. (1974). Are government bonds net wealth? Journal of political economy, 82(6), 1095-1117.
Bolle, M. B. (2016). Como matar a borboleta-azul: Uma crônica da era Dilma. Rio de Janeiro: Intrínseca.
Borges, B. (2016). Bad Luck or Bad Policy: uma investigação das causas do baixo crescimento da economia brasileira nos últimos anos. In: R. Bonelli & F. Veloso (Orgs.), A Crise de Crescimento no Brasil. Elsevier/FGV-Ibre.
Bresser-Pereira, L. C. (2017). Como sair do regime liberal de política econômica e da quase-estagnação desde 1990. Estudos Avançados, 31(89), 7-22. doi: 10.1590/s0103-40142017.31890002
Carvalho, L.B. (2018). Valsa brasileira: do boom ao caos econômico. São Paulo: Todavia.
Christ, C. F. (1968). A simple macroeconomic model with a government budget restraint. The Journal of Political Economy, 76(1), 53-67.
Cripps, F., & Godley, W. (1976). A formal analysis of the Cambridge economic policy group model. Economica, New Series, 43(172), 335-348. doi: 10.2307/2553270
Godley, W. (1999a). Seven unsustainable processes. New York: Levy Economic Institute of Bard College, Annandale-on-Hudson.
Keynes, J. M. (1936 [1985]). A Teoria Geral do Emprego, do Juro e da Moeda. São Paulo: Nova Cultural.
Marquetti, A., Koshiyama, D., & Alencastro, D. (2009). O aumento da lucratividade expande a acumulação de capital? Uma análise de causalidade de Granger para países da OCDE. Revista de Economia Contemporânea, 13(3), 367-390. doi: 10.1590/S1415-98482009000300001
Nassif, A. (2018). A valsa não totalmente afinada de Laura Carvalho: um ensaio-resenha crítico de Valsa brasileira: do boom ao caos econômico. Cadernos do Desenvolvimento, 13(23), 11-35.
Nikiforos, M., Carvalho, L., & Schoder, C. (2015). “Twin deficits” in Greece: in search of causality. Journal of Post Keynesian Economics, 38(2), 302-330. doi: 10.1080/01603477.2015.1065675
Ocampo, A. C., Rada, C., & Taylor, L. (2009). Growth and policy in developing countries: A structuralist approach. Columbia University Press.
Ocampo, J. (2009). Patterns of Net Borrowing in Open Developing Economies. In J. A. Ocampo, C. Rada, & L. Taylor (Orgs.), Growth and policy in developing countries: a structuralist approach (pp. 75-83). New York: Columbia University Press.
Oreiro, J. L. (2017). A grande recessão brasileira: diagnóstico e uma agenda de política econômica. Estudos Avançados, 31(89), 75-88. doi: 10.1590/s0103-40142017.31890009
Pessoa, S. (2016). Crise fiscal estrutural deve resultar em alta inflação no médio prazo. Revista Conjuntura Econômica, 70(10), 10-11.
Polak, J. J. (1957). Monetary analysis of income formation and payments problems. International Monetary Fund Staff Papers, 6(1), 1–50. doi: 10.2307/3866128
Prebisch, R. (1949). O desenvolvimento econômico da América Latina e seus principais problemas. Revista Brasileira de Economia, 3(3), 47-111.
Rezende, F. (2016). Financial fragility, instability and the Brazilian crisis: a Keynes-Minsky-Godley approach. Minds (Multidisciplinary Institute for Development and Strategies): Discussion paper, 1.
Rezende, F. (2017). Desalavancagem do setor privado. Valor Econômico. Disponível em: <http://www.valor.com.br/opiniao/5038378/
desalavancagem-do-setor-privado>
Toda, H., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1-2), 225-250. doi: 10.1016/0304-4076(94)01616-8
Volcker, P.A. (1984). Facing up to the twin deficits. Challenge, 27(1), 4–9. doi: 10.1080/05775132.1984.11470902
Copyright (c) 2019 Martin Branco Kirsten, Henrique Morrone
This work is licensed under a Creative Commons Attribution 4.0 International License.
- Authors keep copyrights and concede to the Journal the right to the first publication, with the paper simultaneously licenced under the Creative Commons Attribution 4.0 International License which allows recognised author and journal work sharing.
- Authors are authorized to assume additional contracts separately, for non-exclusive versions of the paper published in this journal (e.g.: publish in an instituional repository or as a book chapter) with the recogntion of authorship and initial publication in this journal.
- Authors are allowed (and are estimulated) to publish and distribute their work online (e.g.: in institutional repositories or at their personal websites) at any point before or during the editorial process, once this may generate productive alterations on the paper, as well as increse the factor of impact and quotation of the published paper (please, see Free Access Effect)
