Exchange Rate in Brazil.

Essay by sgruetUniversity, Master's May 2010

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Table of Contents


Looking Back: Brazil's History - 44 Years in a Nut Shell

1964-1984: The Military Regime

1985-1992: Great Names, Bad Economics

1993-1998: The Real Plan

1999-2008: Crisis and Recovery

Our Analysis of Brazil'sExchange Rate History

Looking Forward: Recommendations - What to Do and What Not to Do


Sources Cited


As 2010 progresses, Brazil is considered among the front runners in the race for recovery of the 2008 global crisis and championed as the poster child for emerging markets. However, the current prosperous situation Brazil revels in as of late could not have transpired without the country enduring substantial problems the course of their recent history. As George Santayana was quoted saying; "those who cannot learn from history are doomed to repeat it". After ignoring their history books from many years, Brazil appears to have reaped the benefits of their checkered history.

In order to learn from and appreciate the extensive improvements made by Brazil, we reflect back their many previous failures.

To best outline the transitions, we trace Brazil's history of economic and political struggles back to 1964 and follow the data up to present times (usually 2008), data permitting. This allows for a careful review and analysis of three major time periods 1964-1985: the military regime period, 1985-1999: a return to democratic elections and the subsequent inflationary crisis, and finally, 1999-to present day, in which Brazil made an astonishing recovery and now leads developing countries in gaining global presence.

Throughout Brazil's colorful history, therein lies a common theme of exchange rate policies as the focal point for economic and political struggles, and are thus being politically motivated. In this paper, we first show these motivations as seen with the military regime rising to power in 1964, trying to maintain authority and control, and...