Growth Volatility and Economic Growth in Brazil

One of the most puzzling evidences of Brazil's economic performance is that, despite the country's ability to grow at high rates, its long-term growth has been disappointing. Behind this deficient long-term outcome, Brazil shows a high growth volatility. It has experienced substantial growth booms and busts for international standards. These recurrent episodes suggest that the persistent non-realization of Brazil's long-term growth potential and the mechanism by which growth has been systematically constrained are associated to the high volatility that the economy has exhibited over decades. The purpose of this paper is to provide an analysis of growth volatility and its impact on Brazil's growth performance and long-term trajectory. We present and discuss some of the critical issues and main patterns of Brazil's economic growth that are associated to growth volatility. Particular attention is given to its long-term underperformance, its macroeconomic regularities and possible causes and implications of its limited growth potential and degree of international convergence. It does so from a historical perspective and from an international perspective, as the case of Brazil is not only relevant per se, but also representative of many emerging economies, particularly in Latin America