Lecture 20 - April 1st, 2019
Brazil’s Responses to the Debt Crisis of the 1980s
Experimenting with unorthodox measures
Luiz Pereira “A Turning Point in the Debt Crisis: Brazil. The US Treasury and the World Bank”
Background: Borrowing for Development
- Brazil followed Import-Substitution Industrialization (ISI) strategy
- Loans available in the 1970s
- Indebted Industrialization (Frieden)
- Important point: sovereign debt
- Smart to borrow if inflation high and interest rate low
- Conditions flip around 1980
Brazil’s Responses to the Debt Crisis of the 1980s
Experimenting with unorthodox measures
Luiz Pereira “A Turning Point in the Debt Crisis: Brazil. The US Treasury and the World Bank”
Background: Borrowing for Development
- Brazil followed Import-Substitution Industrialization (ISI) strategy
- Loans available in the 1970s
- Indebted Industrialization (Frieden)
- Important point: sovereign debt
- Smart to borrow if inflation high and interest rate low
- Conditions flip around 1980
