Brazil: The Blanket is Short

The government is worried about the exchange rate appreciation and the current account deficit. At the same time, its primary expenses are increasing more than the growth rate of GDP. Apparently the government cannot or is not willing to see the direct relationship between the two facts. In trying to attain the impossible, resources will […]

Brazil: Less Emotion and More Reasoning

The debate about global warming and its impacts on human life has been dominated by scientists, engineers and politicians and tends to be either too technical or overly emotional. For Brazil, a country that needs to grow to improve the living standards of its population, we should be suspicious of apocalyptic forecasts that do not […]

Brazil: Back to the Past

The Ministry of Finance is concerned about a possible interest rate hike, by the Central Bank, as a way to control inflation. They were also considering measures to decrease the financing period for consumer credit. Such measure would be a setback, since its impacts would be negligible, it would be inefficient and would increase income […]

Brazil: Back to the Guilds?

There is a proposal in the National Congress to amend the law regulating medical schools by adding an additional requirement to the overall curriculum. According to the proposal, students who finish medical school would still have to pass a proficiency exam in order to start practicing medicine. The additional exam would be proctored by the […]

Brazil: The Invisible Expenses

During this year, the Brazilian government promoted sterilized interventions in the FX market, acquiring international reserves , which now exceed $170 billion. It seems that upon reaching a certain amount, the government may use a share of its international reserves in a fund geared towards the promotion of industrial policy. In our view, this fund […]

Brazil: The Different Ways of Privatizing

Contrary to the past rhetoric, the federal government has just finished the privatization (through concession) of several federal highways. The choice was to grant privilege to the end user of the service, instead of the standard model that was being adopted. It is important to understand the pros and cons of this new model especially […]

Brazil: It Is Time to Stop Buying

The total amount of international reserves has surpassed $160 bn. This is an excessive amount, especially considering the country’s needs and its reality. It is time for the Brazilian Central Bank to stop intervening in the exchange rate. By the end of 2003, the external public debt reached $120 bn. In the same year, the […]

Brazil: A Debate Out of Focus

The debate on postponing the tax on financial transactions (CPMF) is out of focus. In the current scenario, we do not recommend the elimination of such tax. The key issue should not revolve around whether the tax should be renewed or not but on how to control and consciously allocate public spending. A drawback of […]

Not As Bad As It Seems

The sudden shifts in financial markets with the decrease in some asset prices and liquidity crunches are always painful and tend to reduce, on a transitory basis, income and employment. However, financial crises should be seen as an unavoidable consequence of the development and evolution of the markets and not as symptom of their inefficiency. […]