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Three Perspectives on Brazilian Growth Pessimism

Otaviano Canuto's picture
It has become increasingly evident over the last two years that the growth engine of the Brazilian economy has run out of steam. Despite relative resilience during the global financial crisis and following a quick recovery, economic growth registered just 1 percent in 2012 and a meager 2.5 percent in 2013. More recently, the economy grew at the annual equivalent of only 0.6 percent in the first quarter of 2014. Little improvement is expected in the near term. To the contrary, as of early June, the median forecaster expects growth of 1.4 for 2014 and 1.8 percent for 2015. Further out the horizon, a muted recovery is anticipated that would bring growth to 2.5-3 percent between 2016 and 2018.

Secular Stagnation: A Working Pair of Scissors Needs Two Blades

Otaviano Canuto's picture
The role of asset bubbles as an unsustainable pillar of pre-2007 world economic growth has been widely recognized. Simultaneously, analysts worry that a secular stagnation, though momentarily offset by asset bubbles, may have been already at play in major advanced economies, leading to the ongoing sluggish and feeble recovery.

Clogged Metropolitan Arteries

Otaviano Canuto's picture
Bad conditions of mobility and accessibility to jobs and services in most metropolitan regions in developing countries are a key development issue. Besides the negative effects on the wellbeing of their populations associated with traffic congestion and time spent on transportation, the latter mean economic losses in terms of waste of human and material resources.

Sovereign Wealth Funds Are Coming Home

Otaviano Canuto's picture

Followers of this blog have read several recent pieces on the changing landscape of investment finance in developing countries, particularly in natural resource-rich countries. We have approached the rise of development banks partially filling the void left by the retrenchment of international banking. We have also highlighted how less tax avoidance on extractive industries can be obtained and how that would make a huge difference in terms of resources available for local investment in those countries, provided that appropriate policies are put into place. Furthermore, we have pointed out the emergence of new forms and contracts of resource-backed investment finance, including a redirection toward home in asset acquisition made by developing countries’ Sovereign Wealth Funds. 

I have invited three colleagues who have been studying the subject more closely to write the short piece below. Hope you will enjoy it as much as I did.
 

Calibrating 2014

Otaviano Canuto's picture
The global economy looks poised to display better growth performance in 2014. Leading indicators are pointing upward – or at least to stability – in major growth poles. However, for this to translate into reality policymakers will need to be nimble enough to calibrate responses to idiosyncratic challenges.

Brazil, Korea: Two Tales of a Macroprudential Regulation

Otaviano Canuto's picture
The pervasiveness and relevance of asset price booms and busts in modern economies has now been fully acknowledged. So has the case for combining prudential regulation and monetary policy in the complementary pursuit of financial and macroeconomic stability.

Elephants and Macro-Financial Linkages

Otaviano Canuto's picture
Global financial integration and the linkages between the financial and the real sides of economies are sources of huge policy challenges. This is now beyond doubt, after what we saw in the run-up to and the unfolding of the 2008 global financial crisis.

Moving Past the Commodity Supercycle: Are We There Yet?

Otaviano Canuto's picture
Some analysts are predicting that the commodity price boom of the new millennium is something that has played itself out. Except for shale gas and its downward pressure on U.S. natural gas prices, however, natural resource-based commodity prices have remained high by historical records in the last few years, despite the feebleness of the recent global economic recovery.

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