The macroeconomic tripod and the Workers' Party administrations
Luiz Carlos Bresser-Pereira
in Anthony W. Pereira e Lauro Mattei, eds. (2015) The Brazilian Economy Today: Towards a New Socio-Economic Model? London: Palgrave/Macmillan: 121-134
In 1999 liberal or orthodox economists implemented in Brazil the "macroeconomic tripod", which, in practice, meant overvalued currency (floating exchange rate), high real interest rates (inflation targeting) and primary surplus. In consequence, no real growth. Since 2003 developmental economists tried change this perverse tripod, were initially benefited by a boom of commodities, but eventually failed. They were unable to reject the exchange rate populism which new developmentalism criticizes, and, in consequence, besides the economy remaining trapped by a non-competitive exchange rate and high interest rates, the primary surplus changed into a primary deficit.