Krugman praise and warnings about Brazilian economy excessive optimism

Friday, December 4th 2009 - 08:11 UTC

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Brazil has had a better performance than other countries during the current financial slowdown but it has become necessary “to closely follow so much optimism”, said Economics Nobel Prize Paul Krugman during a conference in Sao Paulo. Read full article

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Bubba
Lula did not dismantle the previous administrations economic policies, which has led to sustainable growth, however, irrational exuberance over this growth in a highly subsidized economy will eventually turn down and go deeper than the current recession.
Dec 04th, 2009 - 01:25 pm - Link - Report abuse 0
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h.
<current capital inflows into Brazil are creating asset bubble>NOT TRUE !
here is no USA ! you can make <entry-exit> in Bovesba fairly but can not into the rest of System..would not be lucrative !
<Real level is not realistic> TRUE ! but should be on present levels to balance of other inner factors. Interest Rates levels not so important ..anyway the System does not use up --8-9%-- levels.!
Brazilian Economy's behaviour is..slow..high..mildly..financing !!
Dec 05th, 2009 - 03:23 am - Link - Report abuse 0
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Nicholas
“irrational exuberance over this growth in a highly subsidized economy will eventually turn down and go deeper than the current recession.”
What? Mr. Buba, if you did our homework you would understand yourself better that you're talking about Argentina, and not about Brazil as you wished. Guess what, Brazil ain't Argentina who is way way way behind A Brazilian government who has it's books and house in order, something that Argentina and even the US fails to do.
“Brazil still has not shown it will be a fast growing economy”
And perhaps that's for the best. The faster you grow, the harder you “can” crash when it goes wrong.
“current capital inflows into Brazil are creating asset bubble”.
I agree with you 2 h that it's not true, because most investors have more confidence in the Brazilian economy and fiscal policy than the American economy, government and it's fiscal policy. That's the main fundamental that they are investing in Brazil, long term.
“Real level is not realistic”
Actually nobody knows what is a true realistic level, neither Krugman, but again the real is high because of speculation ( can be bad), strong confidence by long term domestic and foreign investors in the Brazilian economy in the long term by doing what is suppose to do. I do think that between the 2-3 real for a dollar is much better for the Brazilian exports what creates more wealth. Brazil is definitely the place to be for long term and will become stronger, though it has a long way to go, what is not bad either. Point is, it's on the right track.
Dec 05th, 2009 - 01:58 pm - Link - Report abuse 0
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