The purpose of this paper is to analyze the impact of the trade liberalization process on social exchange rates in Brazil. The main objective is to develop and estimate an appropriate measure for the social exchange rates to be used in the evaluation of investment projects in Brazil. Using an opportunity cost for foreign exchange model to estimate the social exchange rates, the study concludes that there were no important modifications in the ranking of economic activities according to the rates of effective protection. The impact of the trade liberalization process and the change in exchange rate policy regime will only be fully measured in the medium and long run. However, an indication of its effects on the social exchange rates can clearly be observed by the declining tendency of the social exchange rates.
trade liberalization; project appraisal; social exchange rates; exchange rate policy
