Tropical Neomonetharism: The Brazilian Experience in the Nineties

ABSTRACT

This paper reviews the performance of the Brazilian economy during the 1990s, in the light of the neomonetarist policy shift implemented unevenly but incrementally across this decade. The paper shows that this policy shift was associated with, and contributed to, a change in the structure of manufacturing industry, the financial deterioration of the public sector, the tightening of the balance of payments constraint, and increasing external economic dependence. These structural changes were largely responsible for the currency crisis of 1999. Subsequent policy measures have largely failed to address these weaknesses of the Brazilian economy.

KEYWORDS:
Brazil; neoliberalism; neomonetarism; dependency; financial liberalization