Brazil as an Export Economy, 1880-1930

The paper examines the Brazilian core coffee export economy from the 1880s to 1930. Analysis is centered on coffee because of its dominant role in the Brazilian economy and to the persistent high share of Brazilian exports in the world market, which has allowed Brazil to exploit its market power. The implications of Brazil's position as the main world supplier of coffee are analyzed empirically, particularly the links between domestic policy and world coffee prices. The fact that Brazil was the leading coffee producer and exporter implies that production costs in Brazil had a significant influence on world coffee prices. The relevance of this link is shown using econometric techniques for exchange rate fluctuations and tariffs. Due to the magnitude of Brazil's coffee exports in the world market, fluctuations of the Brazilian foreign exchange rate influenced world coffee prices. Most of the effects of the traditionally high tariff were also transferred with a lag to world coffee prices. This is a new interpretation of the political economy of coffee and industry in the golden age of the Brazilian export economy. The paper also looks at commodity exports outside the core: rubber, sugar, and cotton. A section on the export economy, 1930-1960 is included as a coda