Brazil’s response to the international financial crisis: how did financial regulation and monetary policy influence the Brazil’s economic recovery?

Abstract

In the beginning of the international financial crisis, the fact that the international crisis was restricted to the developed countries, and the emerging countries’ fiscal and external situation was comfortable, led a number of analysts and policymakers to give credence to the hypothesis of a ‘decoupling’ of emerging countries; that is, the notion that these economies would be able to sustain their dynamic performance and prove immune to contagion from the crisis. In 2008, moreover, the main concern among central banks, market analysts and multilateral organizations was with the inflationary pressures that emerging countries might suffer as a result of strongly rising food and oil prices.