Macroeconomic Policy, Growth and Income Distribution in the Brazilian Economy in the 2000s

The purpose of this paper is to show that the interaction between large changes in the external conditions facing the Brazilian economy since 2003 and smaller changes in the orientation of domestic economic policy after 2005 explain the improved control of inflation, the recovery of more satisfactory rates of economic growth and the stronger improvement in income distribution and poverty reduction in the second half of the decade. The change in the orientation of economic policy also explains the relatively moderate contraction and strong recovery of the economy after the world crisis hit Brazil in late 2008.

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