## Brazil’s Long-Term Growth Performance—Trying to Explain the Puzzle

_IMF Working Papers, December 1, 2006_

## Source details

**Canonical URL:** [Brazil’s Long-Term Growth Performance—Trying to Explain the Puzzle](https://www.imf.org/en/publications/wp/issues/2016/12/31/brazils-long-term-growth-performance-trying-to-explain-the-puzzle-20139)

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## Bibliographic details
- Authors: Ricardo Adrogué, Martin D. Cerisola
- Published: December 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451865424.001

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### Summary
- This paper assesses Brazil's growth performance from a long-term perspective, using crosscountry and panel estimation techniques, building on the vast empirical literature on growth.
- The empirical evidence presented in this paper 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.
- 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.

### Methodology
- Crosscountry and panel estimation techniques.
- Building on the vast empirical literature on growth.

### Major findings
- Macroeconomic stability and several reforms have helped raise per capita growth in Brazil since the mid-1990s.
- Long-standing structural weaknesses continue to weigh negatively on per capita growth.
- High level of government consumption is identified as a constraint: reducing it would help lower the overall consumption level in the economy and lower the real interest rate, fostering investment and growth.

### Policy implications and recommendations
- Reduce the high level of government consumption to:
  - Lower the overall consumption level in the economy.
  - Lower the intertemporal price—the real interest rate.
  - Help foster investment and growth.

### Subject and keywords
- Subject: Fiscal policy, Government consumption, International liquidity, Real exchange rates, Real interest rates
- Keywords: Brazil, exchange rate, GDP, growth performance, sc, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/brazils-long-term-growth-performance-trying-to-explain-the-puzzle-20139_