Government consumption, foreign interest and repressed investment: the problem of external debt revisited

Vol. 12 No. 3 (1992)

Jul-Sep / 1992
Published July 1, 1992
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Giambiagi, Fábio, and José Carlos Gomes Soares. 1992. “Government Consumption, Foreign Interest and Repressed Investment: The Problem of External Debt Revisited”. Brazilian Journal of Political Economy 12 (3):344-59. https://doi.org/10.1590/0101-31571992-0569.
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Government consumption, foreign interest and repressed investment: the problem of external debt revisited

Fábio Giambiagi
Da Faculdade de Economia e Administração da Universidade Federal do Rio de Janeiro – UFRJ e do Banco Nacional de Desenvolvimento Econômico e Social. – BNDES, Rio de Janeiro/RJ, Brasil .
José Carlos Gomes Soares
Da Faculdade de Economia e Administração da Universidade Federal do Rio de Janeiro – UFRJ, Rio de Janeiro/RJ, Brasil.
Brazilian Journal of Political Economy, Vol. 12 No. 3 (1992), Jul-Sep / 1992, Pages 344-359

Abstract

This paper analyses the evolution of Brazilian public sector expenditures during
the second half of the 1980’s. The interpretation according to which the fiscal crisis is
exogenous and caused by the external debt interest is criticized. The great increase in current
expenditures after 1984, together with a budget restriction that limited public investment is
discussed. Based on it, public sector consumption and not external debt interest payments is
considered the most important factor responsible for the public investment trajectory over
time during the last five years.

JEL Classification: F31; F34; H63.


Keywords: Public expenditure currency crisis debt crisis

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