Comment on “Brazil: Resilience in the Face of the Global Crisis”
destroyed during the crisis) to understand better the full impact of trade on recent economic developments in Brazil.
Interpretation of the Estimates of TFP In growth decompositions, as a residual, anything unaccounted for becomes part of measured TFP. In the case of Brazil, this may have particular significance given the important role of natural resource– intensive sectors in recent economic growth. It could also be important in projecting future TFP growth given the potential for a substantial increase in oil production based on recent discoveries. In terms of recent history, figure D3.2 provides an example of the expansion of land use, which must have made some quantifiable contribution to agricultural sector growth.
International Perspectives Brazilian fiscal and monetary policies leading up to the crisis were clearly of tremendous help in preparing the economy and in dampening the effects of the global crisis. It is important to note, however, that the effect of a lower degree of exposure to trade (as a share of GDP)—often cited as a kind of advantage during the crisis—may be overstated. As noted above, much of the trade impact may be hidden on the supply side, requiring further analysis. Also, using international perspective, figure D3.3 shows that other, more open economies (e.g., China and the newly industrialized countries [NICs] in Asia) showed a fairly similar performance during the global crisis. Another perspective is longer-term performance relative to relevant comparators. Figure D3.3 also shows that over the medium-term projection period, Brazilian growth would lead to very gradual convergence with advanced economies (discounting population growth differentials); however, the growth rates are only on a par with some more advanced Asian NICs, and the convergence process would be extremely gradual. Also, using a longer-term historical comparison, figure D3.4 shows that Brazil has not necessarily outperformed the other large economy of Latin America: Mexico. Clearly, since the last recession (2000–02),
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