Economist Calls Brazil’s Monetary Policy Inconsistent

Roberto Macedo, one of Brazil’s best-known economists and commentators, says the government’s inflation targeting system is not working as effectively in Brazil as in other countries, with the result that interest rates are too high to control inflation.

He describes the system as "naïve" and accuses the government of being inconsistent by extending credit at the same time as operating a tight monetary policy.

"This means that, on one hand, you’re holding the brake down with interest rates, but on the other you’re accelerating by expanding credit," he said.

In a wide-ranging interview with Brazil Political Comment, Macedo puts forward alternative ways of combating inflation and expresses optimism over the microeconomic area. He also explains why demographic changes will help narrow Brazil’s social gap in the medium term.

The interview is available in English and Portuguese at
www.brazilpoliticalcomment.com.br 

You can also read John Fitzpatrick’s article "No Consistency in Brazil’s Foreign Policy" in which he describes how Brazil’s politicians have turned their backs on foreign affairs and left them in the hands of civil servants in Brasí­lia who have set their own agenda. Here is an excerpt:

"The reality .. is that Brazil’s foreign policy is a sham, established by bureaucrats, which combines anti-Americanism (sometimes strident, sometimes mild), anti-Europeanism in terms of trade but pro-European when Europe is against American interests, a phony friendship with "brother" Latin countries like Venezuela and Cuba, an uneasy rivalry with Argentina, an avuncular relationship with minnows like Paraguay, a  wishy-washy "solidarity" with poor countries in Africa, particularly Portuguese-speaking places, and closer links with some Middle Eastern countries but not Israel. 

"It is underpinned by an almost obsessive desire to become a permanent member of the UN Security Council and a distinct reluctance to see any kind of Pan-American free trade area which would be dominated by the US."

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