The High Density of Brazilian Production Chains

International trade has undergone a radical transformation in the past decades as production processes have fragmented along cross-border value chains. The Brazilian economy has remained on the fringes of this production revolution, maintaining a very high density of local supply chains. This article calls attention to the rising opportunity costs incurred by such option taken […]

Navigating Brazil’s Path to Growth

Brazil’s macroeconomic management will face four major immediate challenges in the near future.  The response to them will be strengthened if we could have some indication of how to steer the Brazilian economy back to a growth route. A first major challenge will be the upward realignment of domestic regulated prices, in a context of […]

Liquidity Glut, Infrastructure Finance Drought and Development Banks

The world economy faces huge infrastructure financing needs that are not being matched on the supply side. Emerging market economies, in particular, have had to deal with international long-term private debt financing options that are less supportive of infrastructure finance. While unconventional monetary policies in advanced countries in the aftermath of the global financial crisis […]

Secular Stagnation: A Working Pair of Scissors Needs Two Blades

        The role of asset bubbles as an unsustainable pillar of pre-2007 world economic growth has been widely recognized. Simultaneously, analysts worry that a secular stagnation, though momentarily offset by asset bubbles, may have been already at play in major advanced economies, leading to the ongoing sluggish and feeble recovery. Still, there […]

Crisis Recovery: Flying on a Single Engine

Policy makers in the advanced economies at the core of the global financial crisis can make the claim that they prevented a new “Great Depression”. However, recovery since the outbreak of the crisis more than five years ago has been sluggish and feeble. These macroeconomic outcomes have to some extent been shaped by the policy […]

Clogged Metropolitan Arteries

Bad conditions of mobility and accessibility to jobs and services in most metropolitan regions in developing countries are a key development issue. Besides the negative effects on the wellbeing of their populations associated with traffic congestion and time spent on transportation, the latter mean economic losses in terms of waste of human and material resources. […]

China and Emerging Markets: Riding Wild Horses

One month ago, I discussed some major risks to a slight upturn in the global economic scenario for 2014. Among those risks, concerns with the growth slowdown and challenges with shadow banking in China have already come to the fore as the Chinese Year of the Horse approached its inauguration last Friday. Higher perceived risks […]

Sovereign Wealth Funds Are Coming Home

Followers of this blog have read several recent pieces on the changing landscape of investment finance in developing countries, particularly in natural resource-rich countries. We have approached the rise of development banks partially filling the void left by the retrenchment of international banking. We have also highlighted how  less tax avoidance on extractive industries can […]

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