New Consensus Macroeconomics, economic stagnation and an economic agenda: The Brazilian case

Authors

  • Fernando Ferrari Filho Universidade Federal do Rio Grande do Soul
  • Fábio Henrique Bittes Terra UFABC - Universidade Federal do ABC

DOI:

https://doi.org/10.7203/IREP.6.1.29164

Abstract

Since the implementation of the New Consensus Macroeconomics (NCM) theoretical framework in Brazil, in 1999 and 2000, fiscal policy has been operationalized, mainly, according to a fiscal target in terms of a primary budget surplus to aim at stabilizing the debt-to-GDP ratio, the interest rate seems to have only one economic objective, that is, to bring the inflation rate to its target or to its tolerance intervals, and the exchange rate has been characterized by a regime of exchange rate flexibility, but managed by the Central Bank of Brazil. Despite the expected objectives, the aforementioned economic policies, in the period 1999-2022, failed to reduce the public debt – on the contrary, the relation between public debt and GDP grew significantly –, to keep inflation under control at levels suitable for countries that adopt an Inflation Targeting Regime and the exchange rate was volatile and appreciated for most of the period. Furthermore, with regard to economic activity, during this period, the GDP performance was poor, with the industrial sector being the productive segment that lost the most relative share in the composition of Brazilian GDP. Given that, the objective of the article is to show how much the NCM’s economic policies were not only responsible for a dynamic of economic stagnation and growth à la stop-and-go of the Brazilian economy between 1999 and 2022, but also contributed for the country’s de-industrialization process. Moreover, it presents an Economic Agenda to overcome the economic stagnation.

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Author Biographies

Fernando Ferrari Filho, Universidade Federal do Rio Grande do Soul

Profesor jubilado de Economía de la Universidad Federal de Rio Grande do Sul, ex investigador del Consejo Nacional de Desarrollo Científico y Tecnológico y ex presidente de la Asociación Keynesiana Brasileña

Fábio Henrique Bittes Terra, UFABC - Universidade Federal do ABC

Profesor asociado de la Universidad Federal ABC, profesor visitante de la Universidad Federal de Uberlândia, investigador del Consejo Nacional de Desarrollo Científico y Tecnológico y ex presidente de la Asociación Keynesiana Brasileña

References

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Ferrari Filho, F.; Terra, F.H.B. (2023). “The Brazilian ‘secular stagnation’: Its causes and an agenda to overcome it”. Brazilian Journal of Political Economy, 43 (1), January-March: 96-109.

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Published

2024-07-10

How to Cite

Ferrari Filho, F., & Bittes Terra, F. H. (2024). New Consensus Macroeconomics, economic stagnation and an economic agenda: The Brazilian case. International Review of Economic Policy-Revista Internacional De Política Económica, 6(1), 1–15. https://doi.org/10.7203/IREP.6.1.29164
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Issue

Vol. 6 No. 1 (2024)

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Articles

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