Brazil is not underperforming

In the blog just prior to this, Roberto Rigobon stated his view that external factors (“luck”) have accounted for recent Brazilian higher rates of growth: “It seems that policy has not made the economy better, but just get by”. Let me argue otherwise.             Interest rates             Rigobon gives credit to the external environment as […]

Straitjackets on Brazilian Sub-National Finance

Fiscal discipline in large federations is a particularly complex issue, and this is obviously also the case in Latin America (Brazil, Mexico, Argentina…). Let me point out two reasons for introducing today the topic into our discussions on Latin American macroeconomics: The steady decline in market interest rates in Brazil has sparked some discussion on […]

Investment Climate and Microeconomic Reforms

Alex Uriarte has called our attention to the hampering effects of high levels of informality on productivity growth in Latin America. Informality distorts competition in domestic markets as it leads to cost disadvantages by efficient, law-abiding companies and thus negatively affects incentives to invest. It also implies lower incentives to benefit from economies of scale […]

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