An interpretation of Brazil’s growth deceleration

Vol. 25 No. 3 (2005)

Jul-Sep / 2005
Published July 1, 2005
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Bacha, Edmar Lisboa, and Regis Bonelli. 2005. “An Interpretation of Brazil’s Growth Deceleration”. Brazilian Journal of Political Economy 25 (3):163-89.

An interpretation of Brazil’s growth deceleration

Edmar Lisboa Bacha
Instituto de Estudos de Política Econômica, Casa das Garças, Rio de Janeiro.
Regis Bonelli
ECOSTRAT Consultores e IPEA — Instituto de Pesquisa Econômica Aplicada, Rio de Janeiro.
Brazilian Journal of Political Economy, Vol. 25 No. 3 (2005), Jul-Sep / 2005, Pages 163-189


The paper aims at explaining why Brazil’s GDP growth plunged after 1980. Brazil’s GDP grew at 7% yearly from 1940 to 1980 but at only 2.5% per year since then. Increases in the relative price of investment that reduced the purchasing power of savings, associated to declines in the productivity of capital, seem to have been the most important factors behind the observed loss of dynamism. The tentative conclusion is that inward-oriented economic policies since the 1970s and, perhaps, even as early as the 1950s, had negative long-run growth implications that were aggravated by populist policies in the early years of the post-1984 redemocratization.

JEL Classification: 047; 054.

Keywords: Economic Growth Capital Accumulation Savings Relative Price of the Investment Capital Productivity