KEY ISSUES Context. Brazil is recovering gradually from the growth slowdown that started in mid- 2011, but the recovery remains uneven and inflation elevated. Output is estimated at potential with supply-side constraints, linked to tight labor market conditions and protracted weak investment...

This paper studies the sources of macroeconomic fluctuations in developing countries using a structural VAR approach. Identification of the sources is achieved using long-run restrictions derived from a theoretical model of a small open economy encompassing a large number of macroeconomic...

Although accommodative policies and widespread indexation may account for the persistence of high inflation, they cannot explain changes in the inflation rate. This paper examines the causes of such changes for the high-inflation episodes immediately preceding the recent “heterodox” attempts...

Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil’s influence on its neighboring economies, documenting trade linkages over the last two...

Even though institutions are created to protect workers, they may interfere with labor market functioning, raise unemployment, and end up being circumvented by informal contracts. This paper uses Brazilian microeconomic data to show that the institutional changes introduced by the 1988...