Brazil in the World of Economy Harvard Case Solution & Analysis

Brazil in the World of Economy Case Solution 

Brazil’s Macro Economic Performance

Although Brazil was referred to as economic miracle in early 1970’s, the debtcrises that started from Latin America and the later spread over the world also hit Brazil. There were some other economic shocks like Russian crises were also a major cause of Brazilian crisis.

In light of these we see that in late 1990’s due to externalities if we talk about financial stability, then the rate of inflation in Brazil reached approximately 15 %and the growth in GDP was just 1 %in 1998s final quarter. Unstable Institutions also create a major hectic in the economy in the same way as it is evident in 1990’s which means that the turnover of governor in central banks found 1%while Latin America and Brazil had high rate of turnover.

The balance of payment shows the current account deficit, which indicates that the economy of Brazil is a creditor or in debt.It is contributing more than it is sparing and it is utilizing assets from different economies to meet its local utilization and venture prerequisites. Foreign Direct investment has a significant influence on GDP while GDP and inflation are negatively associated.

Early 1990’s were not good in terms of FDI.Pinheiro, A. C., Giambagi, F., &Gostkorzewicz, J. (2000) based on their quantitative analysis found that in 1990’s there was regular increase in inflation rate and in 1994, they faced hyperinflation. Moreover, it is also argued that the execution of some customary macroeconomic markers was not the reason for any benefit; financial development has been as it was moderate and the development rates have declined. Moreover, the unemployment has increased and monetary shortages have been high; net open division obligation has expanded amazingly rapidly; the outside part has seen low development in terms of exports and increase in current account deficits.

Brazil’s Place in the World Economy early 2009

As stated earlier that the Brazilian economy had faced of issues in terms of macro-economic though there were short miracles in 1970’s however,the overall economy was unable to sustain itself. The 21st century remained successful for Brazil as the gold man investment bank announced Brazil to be a part of BRIC countries and had sight of seeing it as a leading nation in the future.

Being a member of BRIC nations was a huge success as other members had the power to expand and they kept on experiencing economic growth. 2009 was a problematic year for the world due to the global recession whereas;Brazil was one of the countries which came out from the recession. While the growth rate in 2009 was 5 %percent then for that reason “The Economist” published the article based on successful economic development of Brazil that article is entitles “Brazil Takes Off”.

 Brazil’s global vicinity is expanded, as the economy has crossed borders. Moreover, in early 2009 Brazil had increased its investment in other countries and it had risen from 700 million to 20 billion during these years.An example of this is that a Brazil-originated company, Petrobras,” is moving globally and it is doing a huge investment in other countries.

In addition to this, it also acquired organizations in the United States such as in in 2008 the companies of Brazil took over Anheuser, which is an American based company.

Brazil is delighted in political and monetary strength as it is progressing positively in other countries since the past two years; however its monetary achievements within country also at world financial level have been moderately modest. Therefore, in this case it could be said that the country's impact and glory have remained restricted..................

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