Volume 43, Number 171,
October-December 2012
Argentina and Brazil:
Macroeconomic Challenges
Eduardo Bastian and Elena Soihet

In summary, Brazil and Argentina took very different paths following their currency crises, and the objectives proposed by the respective macroeconomic regimes were at least relatively successful when considering the established priorities. In Brazil, inflation rates stayed at relatively low levels, while in Argentina, growth rates were high and industry recovered.

However, adopting these regimes also brought along negative effects. In Brazil, inflation led to currency appreciation that protected the Brazilian economy from the inflationary impacts of the high commodities cycle, but on the other hand, led to a process of reprimarization of the export pattern, exposing the country to the risk of deindustrialization. In Argentina, the stable and competitive exchange rate strategy prevented the use of currency appreciation as a protection mechanism against commodities inflation. As a result of this shock of increased commodities and due to salary increase pressure, inflation rates increased and today have provoked the real appreciation of the Argentinean exchange rate, threatening the principal pillar of the Argentinean macroeconomic regime.

In this context, these problems constitute challenges today for both the Brazilians and Argentineans. It will be necessary to make changes in the current paths of these macroeconomic regimes, because if these changes are ignored, the two economies will face more serious difficulties in the future. To summarize, the relative success of the first decade of the twenty-first century cannot conceal the need for future changes.


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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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